HANDOUT - Academique
Transcript of HANDOUT - Academique
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ADVANCED DIPLOMA OF MANAGEMENT
(Human Resources) BSB60915
Lead and Manage Organisational Change
BSBINN601
STUDENT HANDOUT
This unit describes the performance outcomes skills and knowledge required to determine strategic change requirements and opportunities and to develop implement and evaluate change management strategies No licensing legislative regulatory or certification requirements apply to this unit at the time of endorsementThis unit applies to managers with responsibilities that extend across the organisation or across significant parts of a large organisation They may have a dedicated role in human resources management human resources development or work in a strategic policy or planning area The unit takes a structured approach to change management and applies to people with considerable work experience and organisational knowledge
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ELEMENT PERFORMANCE CRITERIA
1 Identify change
requirements and
opportunities
11 Identify strategic change needs through an analysis of
organisational objectives
12 Review existing policies and practices against strategic
objectives to identify change requirements
13 Monitor trends in the external environment to identify events
or trends that impact on the achievement of organisations
objectives
14 Identify major operational change requirements due to
performance gaps business opportunities or threats or
management decisions
15 Review and prioritise change requirements or opportunities
with relevant managers
16 Consult specialists and experts to assist in the identification of
major change requirements and opportunities
2 Develop change
management strategy
21 Undertake cost-benefit analysis for high priority change
requirements and opportunities
22 Undertake risk analysis identify barriers to change and agree
and record mitigation strategies
23 Develop change management project plan
24 Obtain approvals from relevant authorities to confirm the
change management process
25 Assign resources to the project and agree reporting protocols
with relevant managers
3 Implement change
management strategy
31 In consultation with relevant groups and individuals develop
communication or education plan to promote the benefits of the
change to the organisation and to minimise loss
32 Arrange and manage activities to deliver the communication or
education plans to relevant groups and individuals
33 Consult with relevant groups and individuals for input into the
change process
34 Identify and respond to barriers to the change according to risk
management plans
35 Action interventions and activities set out in project plan
according to project timetable
36 Activate strategies for embedding the change
37 Conduct regular evaluation and review and modify project
plan where appropriate to achieve change program objectives
Its not the progress I mind its the change I dont like mdashMark Twain
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Session 1 What is change and why must it happen How do organizations cope with change What external factors can influence change and why
Session 2 How do you develop change management strategies The role of thinking and feeling
Homework - is due at the end of the four week unit
Session 3 What do we need to do to implement change management strategy Who else needs to be involved and why
Session 4 Prepare for assessment
Managing Organisational Change
ldquoFaced with the choice between changing onersquos mind and proving that there is no need to do so almost everybody
gets busy on the proofrdquo ndash John Kenneth Galbraith
Todayrsquos fast-paced economy demands that businesses change or die Few companies manage corporate
transformations as well as they would like It is said that anywhere from 50 to 80 percent of all change initiatives fail
Between 1980 and 1995 researchers at the Harvard Business School tracked the impact of change efforts among the
Fortune 100 Only 30 percent of those initiatives produced an improvement in bottom-line results that exceeded the
companyrsquos cost of capital and only 50 percent led to an improvement in market share price Each of the companies
invested $1 billion in change programs over the 15-year period
For years companies have struggled with growing competition by introducing improvements into every function and
process But the competitive pressures keep increasing the pace of change keeps accelerating and companies must
continually search for higher levels of quality service and overall business agility The treadmill moves faster
companies work harder but results improve slowly or not at all
One problem is that too few people at every level really support the initiative with their hearts and minds To foster
pro-active effort and imaginative thinking not only do you have to engage more employees yoursquove got to engage
them more fully
Change is intensely personal For change to occur in any organisation each individual must think feel or do something
different Even in large organisations which depend on thousands of employees understanding company strategies
well enough to translate them into appropriate actions leaders must win their followers one by one
Part of the problem stems from applying mechanistic models that were first used in scientific management under the
legacy of Frederick Winslow Taylor These principles were first applied to managing physical work in manufacturing
plants When superimposed on the new model of todayrsquos knowledge organisation change initiatives are broken into
pieces and then the pieces are managed But today change is dynamic and the pieces are constantly in motion The
challenge is to innovate mental work ndash not to replicate physical work
Thinking in anticipation of changes
How do you teach thousands of people to think strategically recognise patterns and to anticipate problems and
opportunities before they occur There is a new level of complexity and ldquochaosrdquo that can be managed only when
information flows across boundaries When we recognise that critical information can be held anywhere in and out of
the organisation we create opportunities for those with information to influence decision-making
An organisation may simultaneously be working on TQM process re-engineering employee empowerment and
several other programs designed to improve performance How do you connect and balance all the pieces In
managing change the challenge is to understand how the pieces balance off one another how changing one element
changes the rest and how sequencing and pace affect the whole structure
Managing change means creating conversations between the people leading the change effort and those who are
expected to implement the new strategies It means managing the organisational context in which change can occur as
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well as managing the emotional and intellectual connections that are essential for transformation
ldquoAll real change involves major uncertainty and we cannot deny the questioning time to others simply because we
have already answered the questions for ourselvesrdquo ndash Bernice McCarthy
Feelings and perspectives
Change is fundamentally about feelings and perspectives And companies that want their workers to contribute with
their heads and hearts have to accept that emotions are essential to the new management style The old management
paradigm said that people are allowed to have feelings as long as they are positive ones The new management
paradigm says that managing people is managing feelings whether they are positive negative or neutral In the most
successful change programs large organisations connect with their people most directly through values ndash and values
ultimately are about beliefs and feelings
When an organisation denies the validity of emotions in the workplace or seeks to permit only certain kinds of
emotions two things happen The first is that managers cut themselves off from their own emotional lives And in
doing so they cut off the ideas solutions and new perspectives that other people can contribute
Facing negativity
So how then to deal with negative emotions which are so common during changes Itrsquos true that getting a group of
people together and allowing them to vent their emotions can initiate a negative spiral A manager who is results-
oriented may not be comfortable or prepared to deal with what his people have to say when it is negative
Here is an approach that works A project director in one large organisation scheduled meetings twice a week for his
team undergoing a complex change effort For the first 15 minutes staff members were allowed to complain and vent
But only for 15 minutes Each person was allowed to say anything they felt But the second 15 minutes were devoted
to bragging about gains and successes Ending the meeting on how people overcame obstacles became an energising
process
During the year of the change project these meetings built up a remarkable degree of camaraderie among team
members Although harder for some to participate in than others everyone came to realise that the conversion project
was hard for everyone They began to give each other ideas about ways to handle tough situations As they began to
tell each other about their little victories they felt like a winning team When the project was over they felt better
about themselves and their organisation than they had at the beginning
Some consultants specialise in helping organisations navigate mergers acquisitions re-engineering and major change
initiatives Such change agents can help answer the questions What makes for a successful change process What can
be learned from the multitude of change failures
ldquoIt isnrsquot the changes that do you in itrsquos the transitions Change is not the same as transition Change is situational
the new site the new boss the new team roles the new policy Transition is the psychological process people go
through to come to terms with the new situation Change is external transition is internalrdquo William Bridges
Managing Transitions 1991
Dealing with loss
The failure to identify and be ready for the endings and losses that change produces is the largest single problem that
organisations in transition encounter No one can accurately foresee how many people will experience the
ldquoimprovementrdquo program as a loss of something related to their job However a robust impact assessment of the
program on affected people is a good first step
All change involves letting go of something Even good changes such as promotions and expansions involve losses and
endings Before you can begin something new you have to end what used to be In order to learn a new way of doing
things you have to unlearn the old way Change and endings go together you canrsquot have one without the other The
problem is ndash nobody likes endings
It isnrsquot necessarily the change that people resist Itrsquos the losses and endings that they experience It does little good to
talk about how healthy the outcome of the change will be First you have to deal directly with the losses and endings
But how
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1 Identify who is losing what and why
2 Accept the reality and importance of the subjective losses (Donrsquot be surprised at ldquooverreactionrdquo)
3 Expect and accept the signs of ldquogrievingrdquo Acknowledge the losses openly and with empathy
4 Give people information again and again define whatrsquos over and what isnrsquot what has changed and what
stays the same
5 Mark the endings treat the past with respect
6 Provide plenty of forums for discussion about both positive and negative changes
7 Provide coaching services preferably from outside sources
Providing coaching for change
An effective way of dealing with these issues is by offering the services of coaches to deal with change management
Individual time and attention with a professional coach is an excellent way for people to deal with their experiences
The opportunity to discuss the un-discussables with an outside person can create smooth transitions
The second step through transitions involves the acceptance of a neutral zone a sort of no-manrsquos land between the old
reality and the new It is the time between the old identity and the new It is a most uncomfortable time because of the
insecurity of not knowing If you donrsquot expect this period and deal with it you may mistakenly conclude that the
confusion you feel is a sign that therersquos something wrong with the program
If you try to rush through this period you risk compromising the change program ndash but also you will lose a great
opportunity As painful and uncomfortable as people feel in this neutral zone it is the individualrsquos and the
organisationrsquos best chance for creativity renewal and development
The neutral zone is both a dangerous and an opportune place It is the very core of the transition process It is the time
that people want most to leave and to abort the process It is the place and time when the old habits that are no longer
adaptive to the situation are extinguished and new better patterns of habit begin to take shape It is the chaos in which
the old form of things dissolves and from which the new form emerges
People make the new beginning only if they have first made an ending and spent some time in the neutral zone Yet
most organisations try to start with the beginning rather that finishing with the old first
First You Lose and Then You Winhellip
When major changes are announced they emphasise all the benefits that will follow with the successful new strategies
While fanfare and power point presentations can be theatrical and entertaining the danger lies in giving little attention
to the reality of loss that the changes are bringing Change means loss The loss has to be processed before people will
change their behaviours in the desired direction Here are some common reactions that arise
Anger This may be evident as grumbling as foot-dragging mistakes and even sabotage Listen to what is being said
Donrsquot take on the blame however when anger is being misdirected at you Distinguish between acceptable feelings
and unacceptable acting-out behaviours
Bargaining There may be unrealistic attempts to get out of the situation by trying to strike a deal Distinguish these
efforts from real problem solving Donrsquot be swayed by desperate arguments and impossible promises
Anxiety The fear of an unknown future may lead some to create catastrophic fantasies Such feelings may be silent or
expressed Again acknowledge and accept these emotions as natural Donrsquot make people feel stupid for experiencing
anxiety Communicate new information as it becomes available Commiserate with them when it is not
Sadness This is the heart of the grieving process It may be experienced as everything from silence to tears It is often
behind feelings of anger Encourage people to say what they are feeling and share your feelings too Trying to reassure
people with unrealistic suggestions of hope may fall flat You can empathise as long as itrsquos genuine
Disorientation Even organised people may experience forgetfulness confusion and clumsiness during this period
These feelings are so uncomfortable that people will do strange things to avoid them Give people extra support and
attention
Depression Some people may experience feelings of hopelessness and exhaustion Depression is hard to be around
You canrsquot ignore it people still have to get their work done You can help by restoring peoplersquos sense of having some
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control over their situations
If you suppress the feelings and push people to get over them it will be difficult to successfully enter into the new
changes with any sense of commitment or enthusiasm If you want to engage people to support an initiative with their
hearts and minds you must recognise their feelings and acknowledge their losses before moving into new beginnings
Managing Organizational Change Organizational change occurs when a company makes a transition from its current state to some desired future state Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change effort Todays business environment requires companies to undergo changes almost constantly if they are to remain competitive Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to survive Such changes may be relatively minormdashas in the case of installing a new software programmdashor quite majormdashas in the case of refocusing an overall marketing strategy fighting off a hostile takeover or transforming a company in the face of persistent foreign competition Organizational change initiatives often arise out of problems faced by a company In some cases however companies change under the impetus of enlightened leaders who first recognize and then exploit new potentials dormant in the organization or its circumstances Some observers more soberly label this a performance gap which able management is inspired to close But organizational change is also resisted andmdashin the opinion of its promotersmdashfails The failure may be due to the manner in which change has been visualized announced and implemented or because internal resistance to it builds Employees in other words sabotage those changes they view as antithetical to their own interests AREAS OF ORGANIZATIONAL CHANGE Students of organizational change identify areas of change in order to analyze them Daniel Wischnevsky and Fariborz Daman for example writing in Journal of Managerial Issues single out strategy structure and organizational power Others add technology or the corporate population (people) All of these areas of course are related companies often must institute changes in all areas when they attempt to make changes in one The first area strategic change can take place on a large scalemdashfor example when a company shifts its resources to enter a new line of businessmdashor on a small scalemdashfor example when a company makes productivity improvements in order to reduce costs There are three basic stages for a company making a strategic change 1) realizing that the current strategy is no longer suitable for the companys situation 2) establishing a vision for the companys future direction and 3) implementing the change and setting up new systems to support it Technological changes are often introduced as components of larger strategic changes although they sometimes take place on their own An important aspect of changing technology is determining who in the organization will be threatened by the change To be successful a technology change must be incorporated into the companys overall systems and a management structure must be created to support it Structural changes can also occur due to strategic changesmdashas in the case where a company decides to acquire another business and must integrate itmdashas well as due to operational changes or changes in managerial style For example a company that wished to implement more participative decision making might need to change its hierarchical structure People changes can become necessary due to other changes or sometimes companies simply seek to change workers attitudes and behaviors in order to increase their effectiveness or to stimulate individual or team creative-ness Almost always people changes are the most difficult and important part of the overall change process The science of organization development was created to deal with changing people on the job through techniques such as education and training team building and career planning RESISTANCE TO CHANGE A manager trying to implement a change no matter how small should expect to encounter some resistance from within the organization Resistance to change is normal people cling to habits and to the status quo
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To be sure managerial actions can minimize or arouse resistance People must be motivated to shake off old habits This must take place in stages rather than abruptly so that managed change takes on the character of natural change In addition to normal inertia organization change introduces anxieties about the future If the future after the change comes to be perceived positively resistance will be less Education and communication are therefore key ingredients in minimizing negative reactions Employees can be informed about both the nature of the change and the logic behind it before it takes place through reports memos group presentations or individual discussions Another important component of overcoming resistance is inviting employee participation and involvement in both the design and implementation phases of the change effort Organized forms of facilitation and support can be deployed Managers can ensure that employees will have the resources to bring the change about managers can make themselves available to provide explanations and to minimize stress arising in many scores of situations Some companies manage to overcome resistance to change through negotiation and rewards They offer employees concrete incentives to ensure their cooperation Other companies resort to manipulation or using subtle tactics such as giving a resistance leader a prominent position in the change effort A final option is coercion which involves punishing people who resist or using force to ensure their cooperation Although this method can be useful when speed is of the essence it can have lingering negative effects on the company Of course no method is appropriate to every situation and a number of different methods may be combined as needed TECHNIQUES FOR MANAGING CHANGE EFFECTIVELY Managing change effectively requires moving the organization from its current state to a future desired state at minimal cost to the organization Key steps in that process are
1 Understanding the current state of the organization This involves identifying problems the company faces assigning a level of importance to each one and assessing the kinds of changes needed to solve the problems
2 Competently envisioning and laying out the desired future state of the organization This involves picturing the ideal situation for the company after the change is implemented conveying this vision clearly to everyone involved in the change effort and designing a means of transition to the new state An important part of the transition should be maintaining some sort of stability some thingsmdashsuch as the companys overall mission or key personnelmdashshould remain constant in the midst of turmoil to help reduce peoples anxiety
3 Implementing the change in an orderly manner This involves managing the transition effectively It might be helpful to draw up a plan allocate resources and appoint a key person to take charge of the change process The companys leaders should try to generate enthusiasm for the change by sharing their goals and vision and acting as role models In some cases it may be useful to try for small victories first in order to pave the way for later successes
Change is natural of course Proactive management of change to optimize future adaptability is invariably a more creative way of dealing with the dynamisms of industrial transformation than letting them happen willy-nilly That process will succeed better with the help of the the companys human resources than
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The Role of Thinking and Feeling
Thinking differently can help change behaviour and lead to better results
Collect data analyse it
Present the information logically to change peoplersquos thinking
Changed thinking in turn can change behaviour
Feeling differently can change behaviour MORE and lead to even better results
Create surprising compelling and if possible visual experiences
The experiences change how people feel about a situation
A change in feelings can lead to a significant change in behaviour
Follow these strategies for managing change
When you throw a pebble into a pond you create ripples in the water You get the same ripples when you create a change in your business
Think about these strategies for managing your change so that ripples do not become major waves - that ruin your plans
1 Decide on your Change Goal
Start with the end in mind What do you want to achieve How will you know if it has been achieved Who is affected and how will they react How much can you do yourself and how much help do you need
You need to have a clear vision - people like to either seehear or feel the change
2 Consider Timing
Think about the best time to instigate change The greater the degree of change needed the more useful it is to piggy back the change on some actual or perceived crisis For example improvements in work practices may be more acceptable in times of recession when people are concerned about keeping their jobs
You may find that there is a natural window of opportunity where the change makes sense to the majority of people Realise that major change takes time and allow for that If you attempt to rush through a change attitudes may not have changed and the change effect may not last in the long term
3 Be Aware of Culture
Most change initiatives fail because of a lack of recognition of the importance of culture It is difficult to define but if change is to work you need to be aware of the way we do things around here
When planning strategies for managing change aim to involve people in identifying the cultural web in your business
4 Create Visible Short-term Wins
Help people to see the benefits of change in the short term For example if you are changing how you interact with customers publicise some of the positive feedback from them to encourage staff to continue with the new ways of working
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5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
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important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
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health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
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Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
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The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
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- 2 - Lead and Manage Organisational Change HANDOUT 25aug15
ELEMENT PERFORMANCE CRITERIA
1 Identify change
requirements and
opportunities
11 Identify strategic change needs through an analysis of
organisational objectives
12 Review existing policies and practices against strategic
objectives to identify change requirements
13 Monitor trends in the external environment to identify events
or trends that impact on the achievement of organisations
objectives
14 Identify major operational change requirements due to
performance gaps business opportunities or threats or
management decisions
15 Review and prioritise change requirements or opportunities
with relevant managers
16 Consult specialists and experts to assist in the identification of
major change requirements and opportunities
2 Develop change
management strategy
21 Undertake cost-benefit analysis for high priority change
requirements and opportunities
22 Undertake risk analysis identify barriers to change and agree
and record mitigation strategies
23 Develop change management project plan
24 Obtain approvals from relevant authorities to confirm the
change management process
25 Assign resources to the project and agree reporting protocols
with relevant managers
3 Implement change
management strategy
31 In consultation with relevant groups and individuals develop
communication or education plan to promote the benefits of the
change to the organisation and to minimise loss
32 Arrange and manage activities to deliver the communication or
education plans to relevant groups and individuals
33 Consult with relevant groups and individuals for input into the
change process
34 Identify and respond to barriers to the change according to risk
management plans
35 Action interventions and activities set out in project plan
according to project timetable
36 Activate strategies for embedding the change
37 Conduct regular evaluation and review and modify project
plan where appropriate to achieve change program objectives
Its not the progress I mind its the change I dont like mdashMark Twain
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- 3 - Lead and Manage Organisational Change HANDOUT 25aug15
Session 1 What is change and why must it happen How do organizations cope with change What external factors can influence change and why
Session 2 How do you develop change management strategies The role of thinking and feeling
Homework - is due at the end of the four week unit
Session 3 What do we need to do to implement change management strategy Who else needs to be involved and why
Session 4 Prepare for assessment
Managing Organisational Change
ldquoFaced with the choice between changing onersquos mind and proving that there is no need to do so almost everybody
gets busy on the proofrdquo ndash John Kenneth Galbraith
Todayrsquos fast-paced economy demands that businesses change or die Few companies manage corporate
transformations as well as they would like It is said that anywhere from 50 to 80 percent of all change initiatives fail
Between 1980 and 1995 researchers at the Harvard Business School tracked the impact of change efforts among the
Fortune 100 Only 30 percent of those initiatives produced an improvement in bottom-line results that exceeded the
companyrsquos cost of capital and only 50 percent led to an improvement in market share price Each of the companies
invested $1 billion in change programs over the 15-year period
For years companies have struggled with growing competition by introducing improvements into every function and
process But the competitive pressures keep increasing the pace of change keeps accelerating and companies must
continually search for higher levels of quality service and overall business agility The treadmill moves faster
companies work harder but results improve slowly or not at all
One problem is that too few people at every level really support the initiative with their hearts and minds To foster
pro-active effort and imaginative thinking not only do you have to engage more employees yoursquove got to engage
them more fully
Change is intensely personal For change to occur in any organisation each individual must think feel or do something
different Even in large organisations which depend on thousands of employees understanding company strategies
well enough to translate them into appropriate actions leaders must win their followers one by one
Part of the problem stems from applying mechanistic models that were first used in scientific management under the
legacy of Frederick Winslow Taylor These principles were first applied to managing physical work in manufacturing
plants When superimposed on the new model of todayrsquos knowledge organisation change initiatives are broken into
pieces and then the pieces are managed But today change is dynamic and the pieces are constantly in motion The
challenge is to innovate mental work ndash not to replicate physical work
Thinking in anticipation of changes
How do you teach thousands of people to think strategically recognise patterns and to anticipate problems and
opportunities before they occur There is a new level of complexity and ldquochaosrdquo that can be managed only when
information flows across boundaries When we recognise that critical information can be held anywhere in and out of
the organisation we create opportunities for those with information to influence decision-making
An organisation may simultaneously be working on TQM process re-engineering employee empowerment and
several other programs designed to improve performance How do you connect and balance all the pieces In
managing change the challenge is to understand how the pieces balance off one another how changing one element
changes the rest and how sequencing and pace affect the whole structure
Managing change means creating conversations between the people leading the change effort and those who are
expected to implement the new strategies It means managing the organisational context in which change can occur as
Page416
- 4 - Lead and Manage Organisational Change HANDOUT 25aug15
well as managing the emotional and intellectual connections that are essential for transformation
ldquoAll real change involves major uncertainty and we cannot deny the questioning time to others simply because we
have already answered the questions for ourselvesrdquo ndash Bernice McCarthy
Feelings and perspectives
Change is fundamentally about feelings and perspectives And companies that want their workers to contribute with
their heads and hearts have to accept that emotions are essential to the new management style The old management
paradigm said that people are allowed to have feelings as long as they are positive ones The new management
paradigm says that managing people is managing feelings whether they are positive negative or neutral In the most
successful change programs large organisations connect with their people most directly through values ndash and values
ultimately are about beliefs and feelings
When an organisation denies the validity of emotions in the workplace or seeks to permit only certain kinds of
emotions two things happen The first is that managers cut themselves off from their own emotional lives And in
doing so they cut off the ideas solutions and new perspectives that other people can contribute
Facing negativity
So how then to deal with negative emotions which are so common during changes Itrsquos true that getting a group of
people together and allowing them to vent their emotions can initiate a negative spiral A manager who is results-
oriented may not be comfortable or prepared to deal with what his people have to say when it is negative
Here is an approach that works A project director in one large organisation scheduled meetings twice a week for his
team undergoing a complex change effort For the first 15 minutes staff members were allowed to complain and vent
But only for 15 minutes Each person was allowed to say anything they felt But the second 15 minutes were devoted
to bragging about gains and successes Ending the meeting on how people overcame obstacles became an energising
process
During the year of the change project these meetings built up a remarkable degree of camaraderie among team
members Although harder for some to participate in than others everyone came to realise that the conversion project
was hard for everyone They began to give each other ideas about ways to handle tough situations As they began to
tell each other about their little victories they felt like a winning team When the project was over they felt better
about themselves and their organisation than they had at the beginning
Some consultants specialise in helping organisations navigate mergers acquisitions re-engineering and major change
initiatives Such change agents can help answer the questions What makes for a successful change process What can
be learned from the multitude of change failures
ldquoIt isnrsquot the changes that do you in itrsquos the transitions Change is not the same as transition Change is situational
the new site the new boss the new team roles the new policy Transition is the psychological process people go
through to come to terms with the new situation Change is external transition is internalrdquo William Bridges
Managing Transitions 1991
Dealing with loss
The failure to identify and be ready for the endings and losses that change produces is the largest single problem that
organisations in transition encounter No one can accurately foresee how many people will experience the
ldquoimprovementrdquo program as a loss of something related to their job However a robust impact assessment of the
program on affected people is a good first step
All change involves letting go of something Even good changes such as promotions and expansions involve losses and
endings Before you can begin something new you have to end what used to be In order to learn a new way of doing
things you have to unlearn the old way Change and endings go together you canrsquot have one without the other The
problem is ndash nobody likes endings
It isnrsquot necessarily the change that people resist Itrsquos the losses and endings that they experience It does little good to
talk about how healthy the outcome of the change will be First you have to deal directly with the losses and endings
But how
Page516
- 5 - Lead and Manage Organisational Change HANDOUT 25aug15
1 Identify who is losing what and why
2 Accept the reality and importance of the subjective losses (Donrsquot be surprised at ldquooverreactionrdquo)
3 Expect and accept the signs of ldquogrievingrdquo Acknowledge the losses openly and with empathy
4 Give people information again and again define whatrsquos over and what isnrsquot what has changed and what
stays the same
5 Mark the endings treat the past with respect
6 Provide plenty of forums for discussion about both positive and negative changes
7 Provide coaching services preferably from outside sources
Providing coaching for change
An effective way of dealing with these issues is by offering the services of coaches to deal with change management
Individual time and attention with a professional coach is an excellent way for people to deal with their experiences
The opportunity to discuss the un-discussables with an outside person can create smooth transitions
The second step through transitions involves the acceptance of a neutral zone a sort of no-manrsquos land between the old
reality and the new It is the time between the old identity and the new It is a most uncomfortable time because of the
insecurity of not knowing If you donrsquot expect this period and deal with it you may mistakenly conclude that the
confusion you feel is a sign that therersquos something wrong with the program
If you try to rush through this period you risk compromising the change program ndash but also you will lose a great
opportunity As painful and uncomfortable as people feel in this neutral zone it is the individualrsquos and the
organisationrsquos best chance for creativity renewal and development
The neutral zone is both a dangerous and an opportune place It is the very core of the transition process It is the time
that people want most to leave and to abort the process It is the place and time when the old habits that are no longer
adaptive to the situation are extinguished and new better patterns of habit begin to take shape It is the chaos in which
the old form of things dissolves and from which the new form emerges
People make the new beginning only if they have first made an ending and spent some time in the neutral zone Yet
most organisations try to start with the beginning rather that finishing with the old first
First You Lose and Then You Winhellip
When major changes are announced they emphasise all the benefits that will follow with the successful new strategies
While fanfare and power point presentations can be theatrical and entertaining the danger lies in giving little attention
to the reality of loss that the changes are bringing Change means loss The loss has to be processed before people will
change their behaviours in the desired direction Here are some common reactions that arise
Anger This may be evident as grumbling as foot-dragging mistakes and even sabotage Listen to what is being said
Donrsquot take on the blame however when anger is being misdirected at you Distinguish between acceptable feelings
and unacceptable acting-out behaviours
Bargaining There may be unrealistic attempts to get out of the situation by trying to strike a deal Distinguish these
efforts from real problem solving Donrsquot be swayed by desperate arguments and impossible promises
Anxiety The fear of an unknown future may lead some to create catastrophic fantasies Such feelings may be silent or
expressed Again acknowledge and accept these emotions as natural Donrsquot make people feel stupid for experiencing
anxiety Communicate new information as it becomes available Commiserate with them when it is not
Sadness This is the heart of the grieving process It may be experienced as everything from silence to tears It is often
behind feelings of anger Encourage people to say what they are feeling and share your feelings too Trying to reassure
people with unrealistic suggestions of hope may fall flat You can empathise as long as itrsquos genuine
Disorientation Even organised people may experience forgetfulness confusion and clumsiness during this period
These feelings are so uncomfortable that people will do strange things to avoid them Give people extra support and
attention
Depression Some people may experience feelings of hopelessness and exhaustion Depression is hard to be around
You canrsquot ignore it people still have to get their work done You can help by restoring peoplersquos sense of having some
Page616
- 6 - Lead and Manage Organisational Change HANDOUT 25aug15
control over their situations
If you suppress the feelings and push people to get over them it will be difficult to successfully enter into the new
changes with any sense of commitment or enthusiasm If you want to engage people to support an initiative with their
hearts and minds you must recognise their feelings and acknowledge their losses before moving into new beginnings
Managing Organizational Change Organizational change occurs when a company makes a transition from its current state to some desired future state Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change effort Todays business environment requires companies to undergo changes almost constantly if they are to remain competitive Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to survive Such changes may be relatively minormdashas in the case of installing a new software programmdashor quite majormdashas in the case of refocusing an overall marketing strategy fighting off a hostile takeover or transforming a company in the face of persistent foreign competition Organizational change initiatives often arise out of problems faced by a company In some cases however companies change under the impetus of enlightened leaders who first recognize and then exploit new potentials dormant in the organization or its circumstances Some observers more soberly label this a performance gap which able management is inspired to close But organizational change is also resisted andmdashin the opinion of its promotersmdashfails The failure may be due to the manner in which change has been visualized announced and implemented or because internal resistance to it builds Employees in other words sabotage those changes they view as antithetical to their own interests AREAS OF ORGANIZATIONAL CHANGE Students of organizational change identify areas of change in order to analyze them Daniel Wischnevsky and Fariborz Daman for example writing in Journal of Managerial Issues single out strategy structure and organizational power Others add technology or the corporate population (people) All of these areas of course are related companies often must institute changes in all areas when they attempt to make changes in one The first area strategic change can take place on a large scalemdashfor example when a company shifts its resources to enter a new line of businessmdashor on a small scalemdashfor example when a company makes productivity improvements in order to reduce costs There are three basic stages for a company making a strategic change 1) realizing that the current strategy is no longer suitable for the companys situation 2) establishing a vision for the companys future direction and 3) implementing the change and setting up new systems to support it Technological changes are often introduced as components of larger strategic changes although they sometimes take place on their own An important aspect of changing technology is determining who in the organization will be threatened by the change To be successful a technology change must be incorporated into the companys overall systems and a management structure must be created to support it Structural changes can also occur due to strategic changesmdashas in the case where a company decides to acquire another business and must integrate itmdashas well as due to operational changes or changes in managerial style For example a company that wished to implement more participative decision making might need to change its hierarchical structure People changes can become necessary due to other changes or sometimes companies simply seek to change workers attitudes and behaviors in order to increase their effectiveness or to stimulate individual or team creative-ness Almost always people changes are the most difficult and important part of the overall change process The science of organization development was created to deal with changing people on the job through techniques such as education and training team building and career planning RESISTANCE TO CHANGE A manager trying to implement a change no matter how small should expect to encounter some resistance from within the organization Resistance to change is normal people cling to habits and to the status quo
Page716
- 7 - Lead and Manage Organisational Change HANDOUT 25aug15
To be sure managerial actions can minimize or arouse resistance People must be motivated to shake off old habits This must take place in stages rather than abruptly so that managed change takes on the character of natural change In addition to normal inertia organization change introduces anxieties about the future If the future after the change comes to be perceived positively resistance will be less Education and communication are therefore key ingredients in minimizing negative reactions Employees can be informed about both the nature of the change and the logic behind it before it takes place through reports memos group presentations or individual discussions Another important component of overcoming resistance is inviting employee participation and involvement in both the design and implementation phases of the change effort Organized forms of facilitation and support can be deployed Managers can ensure that employees will have the resources to bring the change about managers can make themselves available to provide explanations and to minimize stress arising in many scores of situations Some companies manage to overcome resistance to change through negotiation and rewards They offer employees concrete incentives to ensure their cooperation Other companies resort to manipulation or using subtle tactics such as giving a resistance leader a prominent position in the change effort A final option is coercion which involves punishing people who resist or using force to ensure their cooperation Although this method can be useful when speed is of the essence it can have lingering negative effects on the company Of course no method is appropriate to every situation and a number of different methods may be combined as needed TECHNIQUES FOR MANAGING CHANGE EFFECTIVELY Managing change effectively requires moving the organization from its current state to a future desired state at minimal cost to the organization Key steps in that process are
1 Understanding the current state of the organization This involves identifying problems the company faces assigning a level of importance to each one and assessing the kinds of changes needed to solve the problems
2 Competently envisioning and laying out the desired future state of the organization This involves picturing the ideal situation for the company after the change is implemented conveying this vision clearly to everyone involved in the change effort and designing a means of transition to the new state An important part of the transition should be maintaining some sort of stability some thingsmdashsuch as the companys overall mission or key personnelmdashshould remain constant in the midst of turmoil to help reduce peoples anxiety
3 Implementing the change in an orderly manner This involves managing the transition effectively It might be helpful to draw up a plan allocate resources and appoint a key person to take charge of the change process The companys leaders should try to generate enthusiasm for the change by sharing their goals and vision and acting as role models In some cases it may be useful to try for small victories first in order to pave the way for later successes
Change is natural of course Proactive management of change to optimize future adaptability is invariably a more creative way of dealing with the dynamisms of industrial transformation than letting them happen willy-nilly That process will succeed better with the help of the the companys human resources than
Page816
- 8 - Lead and Manage Organisational Change HANDOUT 25aug15
The Role of Thinking and Feeling
Thinking differently can help change behaviour and lead to better results
Collect data analyse it
Present the information logically to change peoplersquos thinking
Changed thinking in turn can change behaviour
Feeling differently can change behaviour MORE and lead to even better results
Create surprising compelling and if possible visual experiences
The experiences change how people feel about a situation
A change in feelings can lead to a significant change in behaviour
Follow these strategies for managing change
When you throw a pebble into a pond you create ripples in the water You get the same ripples when you create a change in your business
Think about these strategies for managing your change so that ripples do not become major waves - that ruin your plans
1 Decide on your Change Goal
Start with the end in mind What do you want to achieve How will you know if it has been achieved Who is affected and how will they react How much can you do yourself and how much help do you need
You need to have a clear vision - people like to either seehear or feel the change
2 Consider Timing
Think about the best time to instigate change The greater the degree of change needed the more useful it is to piggy back the change on some actual or perceived crisis For example improvements in work practices may be more acceptable in times of recession when people are concerned about keeping their jobs
You may find that there is a natural window of opportunity where the change makes sense to the majority of people Realise that major change takes time and allow for that If you attempt to rush through a change attitudes may not have changed and the change effect may not last in the long term
3 Be Aware of Culture
Most change initiatives fail because of a lack of recognition of the importance of culture It is difficult to define but if change is to work you need to be aware of the way we do things around here
When planning strategies for managing change aim to involve people in identifying the cultural web in your business
4 Create Visible Short-term Wins
Help people to see the benefits of change in the short term For example if you are changing how you interact with customers publicise some of the positive feedback from them to encourage staff to continue with the new ways of working
Page916
- 9 - Lead and Manage Organisational Change HANDOUT 25aug15
5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page316
- 3 - Lead and Manage Organisational Change HANDOUT 25aug15
Session 1 What is change and why must it happen How do organizations cope with change What external factors can influence change and why
Session 2 How do you develop change management strategies The role of thinking and feeling
Homework - is due at the end of the four week unit
Session 3 What do we need to do to implement change management strategy Who else needs to be involved and why
Session 4 Prepare for assessment
Managing Organisational Change
ldquoFaced with the choice between changing onersquos mind and proving that there is no need to do so almost everybody
gets busy on the proofrdquo ndash John Kenneth Galbraith
Todayrsquos fast-paced economy demands that businesses change or die Few companies manage corporate
transformations as well as they would like It is said that anywhere from 50 to 80 percent of all change initiatives fail
Between 1980 and 1995 researchers at the Harvard Business School tracked the impact of change efforts among the
Fortune 100 Only 30 percent of those initiatives produced an improvement in bottom-line results that exceeded the
companyrsquos cost of capital and only 50 percent led to an improvement in market share price Each of the companies
invested $1 billion in change programs over the 15-year period
For years companies have struggled with growing competition by introducing improvements into every function and
process But the competitive pressures keep increasing the pace of change keeps accelerating and companies must
continually search for higher levels of quality service and overall business agility The treadmill moves faster
companies work harder but results improve slowly or not at all
One problem is that too few people at every level really support the initiative with their hearts and minds To foster
pro-active effort and imaginative thinking not only do you have to engage more employees yoursquove got to engage
them more fully
Change is intensely personal For change to occur in any organisation each individual must think feel or do something
different Even in large organisations which depend on thousands of employees understanding company strategies
well enough to translate them into appropriate actions leaders must win their followers one by one
Part of the problem stems from applying mechanistic models that were first used in scientific management under the
legacy of Frederick Winslow Taylor These principles were first applied to managing physical work in manufacturing
plants When superimposed on the new model of todayrsquos knowledge organisation change initiatives are broken into
pieces and then the pieces are managed But today change is dynamic and the pieces are constantly in motion The
challenge is to innovate mental work ndash not to replicate physical work
Thinking in anticipation of changes
How do you teach thousands of people to think strategically recognise patterns and to anticipate problems and
opportunities before they occur There is a new level of complexity and ldquochaosrdquo that can be managed only when
information flows across boundaries When we recognise that critical information can be held anywhere in and out of
the organisation we create opportunities for those with information to influence decision-making
An organisation may simultaneously be working on TQM process re-engineering employee empowerment and
several other programs designed to improve performance How do you connect and balance all the pieces In
managing change the challenge is to understand how the pieces balance off one another how changing one element
changes the rest and how sequencing and pace affect the whole structure
Managing change means creating conversations between the people leading the change effort and those who are
expected to implement the new strategies It means managing the organisational context in which change can occur as
Page416
- 4 - Lead and Manage Organisational Change HANDOUT 25aug15
well as managing the emotional and intellectual connections that are essential for transformation
ldquoAll real change involves major uncertainty and we cannot deny the questioning time to others simply because we
have already answered the questions for ourselvesrdquo ndash Bernice McCarthy
Feelings and perspectives
Change is fundamentally about feelings and perspectives And companies that want their workers to contribute with
their heads and hearts have to accept that emotions are essential to the new management style The old management
paradigm said that people are allowed to have feelings as long as they are positive ones The new management
paradigm says that managing people is managing feelings whether they are positive negative or neutral In the most
successful change programs large organisations connect with their people most directly through values ndash and values
ultimately are about beliefs and feelings
When an organisation denies the validity of emotions in the workplace or seeks to permit only certain kinds of
emotions two things happen The first is that managers cut themselves off from their own emotional lives And in
doing so they cut off the ideas solutions and new perspectives that other people can contribute
Facing negativity
So how then to deal with negative emotions which are so common during changes Itrsquos true that getting a group of
people together and allowing them to vent their emotions can initiate a negative spiral A manager who is results-
oriented may not be comfortable or prepared to deal with what his people have to say when it is negative
Here is an approach that works A project director in one large organisation scheduled meetings twice a week for his
team undergoing a complex change effort For the first 15 minutes staff members were allowed to complain and vent
But only for 15 minutes Each person was allowed to say anything they felt But the second 15 minutes were devoted
to bragging about gains and successes Ending the meeting on how people overcame obstacles became an energising
process
During the year of the change project these meetings built up a remarkable degree of camaraderie among team
members Although harder for some to participate in than others everyone came to realise that the conversion project
was hard for everyone They began to give each other ideas about ways to handle tough situations As they began to
tell each other about their little victories they felt like a winning team When the project was over they felt better
about themselves and their organisation than they had at the beginning
Some consultants specialise in helping organisations navigate mergers acquisitions re-engineering and major change
initiatives Such change agents can help answer the questions What makes for a successful change process What can
be learned from the multitude of change failures
ldquoIt isnrsquot the changes that do you in itrsquos the transitions Change is not the same as transition Change is situational
the new site the new boss the new team roles the new policy Transition is the psychological process people go
through to come to terms with the new situation Change is external transition is internalrdquo William Bridges
Managing Transitions 1991
Dealing with loss
The failure to identify and be ready for the endings and losses that change produces is the largest single problem that
organisations in transition encounter No one can accurately foresee how many people will experience the
ldquoimprovementrdquo program as a loss of something related to their job However a robust impact assessment of the
program on affected people is a good first step
All change involves letting go of something Even good changes such as promotions and expansions involve losses and
endings Before you can begin something new you have to end what used to be In order to learn a new way of doing
things you have to unlearn the old way Change and endings go together you canrsquot have one without the other The
problem is ndash nobody likes endings
It isnrsquot necessarily the change that people resist Itrsquos the losses and endings that they experience It does little good to
talk about how healthy the outcome of the change will be First you have to deal directly with the losses and endings
But how
Page516
- 5 - Lead and Manage Organisational Change HANDOUT 25aug15
1 Identify who is losing what and why
2 Accept the reality and importance of the subjective losses (Donrsquot be surprised at ldquooverreactionrdquo)
3 Expect and accept the signs of ldquogrievingrdquo Acknowledge the losses openly and with empathy
4 Give people information again and again define whatrsquos over and what isnrsquot what has changed and what
stays the same
5 Mark the endings treat the past with respect
6 Provide plenty of forums for discussion about both positive and negative changes
7 Provide coaching services preferably from outside sources
Providing coaching for change
An effective way of dealing with these issues is by offering the services of coaches to deal with change management
Individual time and attention with a professional coach is an excellent way for people to deal with their experiences
The opportunity to discuss the un-discussables with an outside person can create smooth transitions
The second step through transitions involves the acceptance of a neutral zone a sort of no-manrsquos land between the old
reality and the new It is the time between the old identity and the new It is a most uncomfortable time because of the
insecurity of not knowing If you donrsquot expect this period and deal with it you may mistakenly conclude that the
confusion you feel is a sign that therersquos something wrong with the program
If you try to rush through this period you risk compromising the change program ndash but also you will lose a great
opportunity As painful and uncomfortable as people feel in this neutral zone it is the individualrsquos and the
organisationrsquos best chance for creativity renewal and development
The neutral zone is both a dangerous and an opportune place It is the very core of the transition process It is the time
that people want most to leave and to abort the process It is the place and time when the old habits that are no longer
adaptive to the situation are extinguished and new better patterns of habit begin to take shape It is the chaos in which
the old form of things dissolves and from which the new form emerges
People make the new beginning only if they have first made an ending and spent some time in the neutral zone Yet
most organisations try to start with the beginning rather that finishing with the old first
First You Lose and Then You Winhellip
When major changes are announced they emphasise all the benefits that will follow with the successful new strategies
While fanfare and power point presentations can be theatrical and entertaining the danger lies in giving little attention
to the reality of loss that the changes are bringing Change means loss The loss has to be processed before people will
change their behaviours in the desired direction Here are some common reactions that arise
Anger This may be evident as grumbling as foot-dragging mistakes and even sabotage Listen to what is being said
Donrsquot take on the blame however when anger is being misdirected at you Distinguish between acceptable feelings
and unacceptable acting-out behaviours
Bargaining There may be unrealistic attempts to get out of the situation by trying to strike a deal Distinguish these
efforts from real problem solving Donrsquot be swayed by desperate arguments and impossible promises
Anxiety The fear of an unknown future may lead some to create catastrophic fantasies Such feelings may be silent or
expressed Again acknowledge and accept these emotions as natural Donrsquot make people feel stupid for experiencing
anxiety Communicate new information as it becomes available Commiserate with them when it is not
Sadness This is the heart of the grieving process It may be experienced as everything from silence to tears It is often
behind feelings of anger Encourage people to say what they are feeling and share your feelings too Trying to reassure
people with unrealistic suggestions of hope may fall flat You can empathise as long as itrsquos genuine
Disorientation Even organised people may experience forgetfulness confusion and clumsiness during this period
These feelings are so uncomfortable that people will do strange things to avoid them Give people extra support and
attention
Depression Some people may experience feelings of hopelessness and exhaustion Depression is hard to be around
You canrsquot ignore it people still have to get their work done You can help by restoring peoplersquos sense of having some
Page616
- 6 - Lead and Manage Organisational Change HANDOUT 25aug15
control over their situations
If you suppress the feelings and push people to get over them it will be difficult to successfully enter into the new
changes with any sense of commitment or enthusiasm If you want to engage people to support an initiative with their
hearts and minds you must recognise their feelings and acknowledge their losses before moving into new beginnings
Managing Organizational Change Organizational change occurs when a company makes a transition from its current state to some desired future state Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change effort Todays business environment requires companies to undergo changes almost constantly if they are to remain competitive Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to survive Such changes may be relatively minormdashas in the case of installing a new software programmdashor quite majormdashas in the case of refocusing an overall marketing strategy fighting off a hostile takeover or transforming a company in the face of persistent foreign competition Organizational change initiatives often arise out of problems faced by a company In some cases however companies change under the impetus of enlightened leaders who first recognize and then exploit new potentials dormant in the organization or its circumstances Some observers more soberly label this a performance gap which able management is inspired to close But organizational change is also resisted andmdashin the opinion of its promotersmdashfails The failure may be due to the manner in which change has been visualized announced and implemented or because internal resistance to it builds Employees in other words sabotage those changes they view as antithetical to their own interests AREAS OF ORGANIZATIONAL CHANGE Students of organizational change identify areas of change in order to analyze them Daniel Wischnevsky and Fariborz Daman for example writing in Journal of Managerial Issues single out strategy structure and organizational power Others add technology or the corporate population (people) All of these areas of course are related companies often must institute changes in all areas when they attempt to make changes in one The first area strategic change can take place on a large scalemdashfor example when a company shifts its resources to enter a new line of businessmdashor on a small scalemdashfor example when a company makes productivity improvements in order to reduce costs There are three basic stages for a company making a strategic change 1) realizing that the current strategy is no longer suitable for the companys situation 2) establishing a vision for the companys future direction and 3) implementing the change and setting up new systems to support it Technological changes are often introduced as components of larger strategic changes although they sometimes take place on their own An important aspect of changing technology is determining who in the organization will be threatened by the change To be successful a technology change must be incorporated into the companys overall systems and a management structure must be created to support it Structural changes can also occur due to strategic changesmdashas in the case where a company decides to acquire another business and must integrate itmdashas well as due to operational changes or changes in managerial style For example a company that wished to implement more participative decision making might need to change its hierarchical structure People changes can become necessary due to other changes or sometimes companies simply seek to change workers attitudes and behaviors in order to increase their effectiveness or to stimulate individual or team creative-ness Almost always people changes are the most difficult and important part of the overall change process The science of organization development was created to deal with changing people on the job through techniques such as education and training team building and career planning RESISTANCE TO CHANGE A manager trying to implement a change no matter how small should expect to encounter some resistance from within the organization Resistance to change is normal people cling to habits and to the status quo
Page716
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To be sure managerial actions can minimize or arouse resistance People must be motivated to shake off old habits This must take place in stages rather than abruptly so that managed change takes on the character of natural change In addition to normal inertia organization change introduces anxieties about the future If the future after the change comes to be perceived positively resistance will be less Education and communication are therefore key ingredients in minimizing negative reactions Employees can be informed about both the nature of the change and the logic behind it before it takes place through reports memos group presentations or individual discussions Another important component of overcoming resistance is inviting employee participation and involvement in both the design and implementation phases of the change effort Organized forms of facilitation and support can be deployed Managers can ensure that employees will have the resources to bring the change about managers can make themselves available to provide explanations and to minimize stress arising in many scores of situations Some companies manage to overcome resistance to change through negotiation and rewards They offer employees concrete incentives to ensure their cooperation Other companies resort to manipulation or using subtle tactics such as giving a resistance leader a prominent position in the change effort A final option is coercion which involves punishing people who resist or using force to ensure their cooperation Although this method can be useful when speed is of the essence it can have lingering negative effects on the company Of course no method is appropriate to every situation and a number of different methods may be combined as needed TECHNIQUES FOR MANAGING CHANGE EFFECTIVELY Managing change effectively requires moving the organization from its current state to a future desired state at minimal cost to the organization Key steps in that process are
1 Understanding the current state of the organization This involves identifying problems the company faces assigning a level of importance to each one and assessing the kinds of changes needed to solve the problems
2 Competently envisioning and laying out the desired future state of the organization This involves picturing the ideal situation for the company after the change is implemented conveying this vision clearly to everyone involved in the change effort and designing a means of transition to the new state An important part of the transition should be maintaining some sort of stability some thingsmdashsuch as the companys overall mission or key personnelmdashshould remain constant in the midst of turmoil to help reduce peoples anxiety
3 Implementing the change in an orderly manner This involves managing the transition effectively It might be helpful to draw up a plan allocate resources and appoint a key person to take charge of the change process The companys leaders should try to generate enthusiasm for the change by sharing their goals and vision and acting as role models In some cases it may be useful to try for small victories first in order to pave the way for later successes
Change is natural of course Proactive management of change to optimize future adaptability is invariably a more creative way of dealing with the dynamisms of industrial transformation than letting them happen willy-nilly That process will succeed better with the help of the the companys human resources than
Page816
- 8 - Lead and Manage Organisational Change HANDOUT 25aug15
The Role of Thinking and Feeling
Thinking differently can help change behaviour and lead to better results
Collect data analyse it
Present the information logically to change peoplersquos thinking
Changed thinking in turn can change behaviour
Feeling differently can change behaviour MORE and lead to even better results
Create surprising compelling and if possible visual experiences
The experiences change how people feel about a situation
A change in feelings can lead to a significant change in behaviour
Follow these strategies for managing change
When you throw a pebble into a pond you create ripples in the water You get the same ripples when you create a change in your business
Think about these strategies for managing your change so that ripples do not become major waves - that ruin your plans
1 Decide on your Change Goal
Start with the end in mind What do you want to achieve How will you know if it has been achieved Who is affected and how will they react How much can you do yourself and how much help do you need
You need to have a clear vision - people like to either seehear or feel the change
2 Consider Timing
Think about the best time to instigate change The greater the degree of change needed the more useful it is to piggy back the change on some actual or perceived crisis For example improvements in work practices may be more acceptable in times of recession when people are concerned about keeping their jobs
You may find that there is a natural window of opportunity where the change makes sense to the majority of people Realise that major change takes time and allow for that If you attempt to rush through a change attitudes may not have changed and the change effect may not last in the long term
3 Be Aware of Culture
Most change initiatives fail because of a lack of recognition of the importance of culture It is difficult to define but if change is to work you need to be aware of the way we do things around here
When planning strategies for managing change aim to involve people in identifying the cultural web in your business
4 Create Visible Short-term Wins
Help people to see the benefits of change in the short term For example if you are changing how you interact with customers publicise some of the positive feedback from them to encourage staff to continue with the new ways of working
Page916
- 9 - Lead and Manage Organisational Change HANDOUT 25aug15
5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
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Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page416
- 4 - Lead and Manage Organisational Change HANDOUT 25aug15
well as managing the emotional and intellectual connections that are essential for transformation
ldquoAll real change involves major uncertainty and we cannot deny the questioning time to others simply because we
have already answered the questions for ourselvesrdquo ndash Bernice McCarthy
Feelings and perspectives
Change is fundamentally about feelings and perspectives And companies that want their workers to contribute with
their heads and hearts have to accept that emotions are essential to the new management style The old management
paradigm said that people are allowed to have feelings as long as they are positive ones The new management
paradigm says that managing people is managing feelings whether they are positive negative or neutral In the most
successful change programs large organisations connect with their people most directly through values ndash and values
ultimately are about beliefs and feelings
When an organisation denies the validity of emotions in the workplace or seeks to permit only certain kinds of
emotions two things happen The first is that managers cut themselves off from their own emotional lives And in
doing so they cut off the ideas solutions and new perspectives that other people can contribute
Facing negativity
So how then to deal with negative emotions which are so common during changes Itrsquos true that getting a group of
people together and allowing them to vent their emotions can initiate a negative spiral A manager who is results-
oriented may not be comfortable or prepared to deal with what his people have to say when it is negative
Here is an approach that works A project director in one large organisation scheduled meetings twice a week for his
team undergoing a complex change effort For the first 15 minutes staff members were allowed to complain and vent
But only for 15 minutes Each person was allowed to say anything they felt But the second 15 minutes were devoted
to bragging about gains and successes Ending the meeting on how people overcame obstacles became an energising
process
During the year of the change project these meetings built up a remarkable degree of camaraderie among team
members Although harder for some to participate in than others everyone came to realise that the conversion project
was hard for everyone They began to give each other ideas about ways to handle tough situations As they began to
tell each other about their little victories they felt like a winning team When the project was over they felt better
about themselves and their organisation than they had at the beginning
Some consultants specialise in helping organisations navigate mergers acquisitions re-engineering and major change
initiatives Such change agents can help answer the questions What makes for a successful change process What can
be learned from the multitude of change failures
ldquoIt isnrsquot the changes that do you in itrsquos the transitions Change is not the same as transition Change is situational
the new site the new boss the new team roles the new policy Transition is the psychological process people go
through to come to terms with the new situation Change is external transition is internalrdquo William Bridges
Managing Transitions 1991
Dealing with loss
The failure to identify and be ready for the endings and losses that change produces is the largest single problem that
organisations in transition encounter No one can accurately foresee how many people will experience the
ldquoimprovementrdquo program as a loss of something related to their job However a robust impact assessment of the
program on affected people is a good first step
All change involves letting go of something Even good changes such as promotions and expansions involve losses and
endings Before you can begin something new you have to end what used to be In order to learn a new way of doing
things you have to unlearn the old way Change and endings go together you canrsquot have one without the other The
problem is ndash nobody likes endings
It isnrsquot necessarily the change that people resist Itrsquos the losses and endings that they experience It does little good to
talk about how healthy the outcome of the change will be First you have to deal directly with the losses and endings
But how
Page516
- 5 - Lead and Manage Organisational Change HANDOUT 25aug15
1 Identify who is losing what and why
2 Accept the reality and importance of the subjective losses (Donrsquot be surprised at ldquooverreactionrdquo)
3 Expect and accept the signs of ldquogrievingrdquo Acknowledge the losses openly and with empathy
4 Give people information again and again define whatrsquos over and what isnrsquot what has changed and what
stays the same
5 Mark the endings treat the past with respect
6 Provide plenty of forums for discussion about both positive and negative changes
7 Provide coaching services preferably from outside sources
Providing coaching for change
An effective way of dealing with these issues is by offering the services of coaches to deal with change management
Individual time and attention with a professional coach is an excellent way for people to deal with their experiences
The opportunity to discuss the un-discussables with an outside person can create smooth transitions
The second step through transitions involves the acceptance of a neutral zone a sort of no-manrsquos land between the old
reality and the new It is the time between the old identity and the new It is a most uncomfortable time because of the
insecurity of not knowing If you donrsquot expect this period and deal with it you may mistakenly conclude that the
confusion you feel is a sign that therersquos something wrong with the program
If you try to rush through this period you risk compromising the change program ndash but also you will lose a great
opportunity As painful and uncomfortable as people feel in this neutral zone it is the individualrsquos and the
organisationrsquos best chance for creativity renewal and development
The neutral zone is both a dangerous and an opportune place It is the very core of the transition process It is the time
that people want most to leave and to abort the process It is the place and time when the old habits that are no longer
adaptive to the situation are extinguished and new better patterns of habit begin to take shape It is the chaos in which
the old form of things dissolves and from which the new form emerges
People make the new beginning only if they have first made an ending and spent some time in the neutral zone Yet
most organisations try to start with the beginning rather that finishing with the old first
First You Lose and Then You Winhellip
When major changes are announced they emphasise all the benefits that will follow with the successful new strategies
While fanfare and power point presentations can be theatrical and entertaining the danger lies in giving little attention
to the reality of loss that the changes are bringing Change means loss The loss has to be processed before people will
change their behaviours in the desired direction Here are some common reactions that arise
Anger This may be evident as grumbling as foot-dragging mistakes and even sabotage Listen to what is being said
Donrsquot take on the blame however when anger is being misdirected at you Distinguish between acceptable feelings
and unacceptable acting-out behaviours
Bargaining There may be unrealistic attempts to get out of the situation by trying to strike a deal Distinguish these
efforts from real problem solving Donrsquot be swayed by desperate arguments and impossible promises
Anxiety The fear of an unknown future may lead some to create catastrophic fantasies Such feelings may be silent or
expressed Again acknowledge and accept these emotions as natural Donrsquot make people feel stupid for experiencing
anxiety Communicate new information as it becomes available Commiserate with them when it is not
Sadness This is the heart of the grieving process It may be experienced as everything from silence to tears It is often
behind feelings of anger Encourage people to say what they are feeling and share your feelings too Trying to reassure
people with unrealistic suggestions of hope may fall flat You can empathise as long as itrsquos genuine
Disorientation Even organised people may experience forgetfulness confusion and clumsiness during this period
These feelings are so uncomfortable that people will do strange things to avoid them Give people extra support and
attention
Depression Some people may experience feelings of hopelessness and exhaustion Depression is hard to be around
You canrsquot ignore it people still have to get their work done You can help by restoring peoplersquos sense of having some
Page616
- 6 - Lead and Manage Organisational Change HANDOUT 25aug15
control over their situations
If you suppress the feelings and push people to get over them it will be difficult to successfully enter into the new
changes with any sense of commitment or enthusiasm If you want to engage people to support an initiative with their
hearts and minds you must recognise their feelings and acknowledge their losses before moving into new beginnings
Managing Organizational Change Organizational change occurs when a company makes a transition from its current state to some desired future state Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change effort Todays business environment requires companies to undergo changes almost constantly if they are to remain competitive Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to survive Such changes may be relatively minormdashas in the case of installing a new software programmdashor quite majormdashas in the case of refocusing an overall marketing strategy fighting off a hostile takeover or transforming a company in the face of persistent foreign competition Organizational change initiatives often arise out of problems faced by a company In some cases however companies change under the impetus of enlightened leaders who first recognize and then exploit new potentials dormant in the organization or its circumstances Some observers more soberly label this a performance gap which able management is inspired to close But organizational change is also resisted andmdashin the opinion of its promotersmdashfails The failure may be due to the manner in which change has been visualized announced and implemented or because internal resistance to it builds Employees in other words sabotage those changes they view as antithetical to their own interests AREAS OF ORGANIZATIONAL CHANGE Students of organizational change identify areas of change in order to analyze them Daniel Wischnevsky and Fariborz Daman for example writing in Journal of Managerial Issues single out strategy structure and organizational power Others add technology or the corporate population (people) All of these areas of course are related companies often must institute changes in all areas when they attempt to make changes in one The first area strategic change can take place on a large scalemdashfor example when a company shifts its resources to enter a new line of businessmdashor on a small scalemdashfor example when a company makes productivity improvements in order to reduce costs There are three basic stages for a company making a strategic change 1) realizing that the current strategy is no longer suitable for the companys situation 2) establishing a vision for the companys future direction and 3) implementing the change and setting up new systems to support it Technological changes are often introduced as components of larger strategic changes although they sometimes take place on their own An important aspect of changing technology is determining who in the organization will be threatened by the change To be successful a technology change must be incorporated into the companys overall systems and a management structure must be created to support it Structural changes can also occur due to strategic changesmdashas in the case where a company decides to acquire another business and must integrate itmdashas well as due to operational changes or changes in managerial style For example a company that wished to implement more participative decision making might need to change its hierarchical structure People changes can become necessary due to other changes or sometimes companies simply seek to change workers attitudes and behaviors in order to increase their effectiveness or to stimulate individual or team creative-ness Almost always people changes are the most difficult and important part of the overall change process The science of organization development was created to deal with changing people on the job through techniques such as education and training team building and career planning RESISTANCE TO CHANGE A manager trying to implement a change no matter how small should expect to encounter some resistance from within the organization Resistance to change is normal people cling to habits and to the status quo
Page716
- 7 - Lead and Manage Organisational Change HANDOUT 25aug15
To be sure managerial actions can minimize or arouse resistance People must be motivated to shake off old habits This must take place in stages rather than abruptly so that managed change takes on the character of natural change In addition to normal inertia organization change introduces anxieties about the future If the future after the change comes to be perceived positively resistance will be less Education and communication are therefore key ingredients in minimizing negative reactions Employees can be informed about both the nature of the change and the logic behind it before it takes place through reports memos group presentations or individual discussions Another important component of overcoming resistance is inviting employee participation and involvement in both the design and implementation phases of the change effort Organized forms of facilitation and support can be deployed Managers can ensure that employees will have the resources to bring the change about managers can make themselves available to provide explanations and to minimize stress arising in many scores of situations Some companies manage to overcome resistance to change through negotiation and rewards They offer employees concrete incentives to ensure their cooperation Other companies resort to manipulation or using subtle tactics such as giving a resistance leader a prominent position in the change effort A final option is coercion which involves punishing people who resist or using force to ensure their cooperation Although this method can be useful when speed is of the essence it can have lingering negative effects on the company Of course no method is appropriate to every situation and a number of different methods may be combined as needed TECHNIQUES FOR MANAGING CHANGE EFFECTIVELY Managing change effectively requires moving the organization from its current state to a future desired state at minimal cost to the organization Key steps in that process are
1 Understanding the current state of the organization This involves identifying problems the company faces assigning a level of importance to each one and assessing the kinds of changes needed to solve the problems
2 Competently envisioning and laying out the desired future state of the organization This involves picturing the ideal situation for the company after the change is implemented conveying this vision clearly to everyone involved in the change effort and designing a means of transition to the new state An important part of the transition should be maintaining some sort of stability some thingsmdashsuch as the companys overall mission or key personnelmdashshould remain constant in the midst of turmoil to help reduce peoples anxiety
3 Implementing the change in an orderly manner This involves managing the transition effectively It might be helpful to draw up a plan allocate resources and appoint a key person to take charge of the change process The companys leaders should try to generate enthusiasm for the change by sharing their goals and vision and acting as role models In some cases it may be useful to try for small victories first in order to pave the way for later successes
Change is natural of course Proactive management of change to optimize future adaptability is invariably a more creative way of dealing with the dynamisms of industrial transformation than letting them happen willy-nilly That process will succeed better with the help of the the companys human resources than
Page816
- 8 - Lead and Manage Organisational Change HANDOUT 25aug15
The Role of Thinking and Feeling
Thinking differently can help change behaviour and lead to better results
Collect data analyse it
Present the information logically to change peoplersquos thinking
Changed thinking in turn can change behaviour
Feeling differently can change behaviour MORE and lead to even better results
Create surprising compelling and if possible visual experiences
The experiences change how people feel about a situation
A change in feelings can lead to a significant change in behaviour
Follow these strategies for managing change
When you throw a pebble into a pond you create ripples in the water You get the same ripples when you create a change in your business
Think about these strategies for managing your change so that ripples do not become major waves - that ruin your plans
1 Decide on your Change Goal
Start with the end in mind What do you want to achieve How will you know if it has been achieved Who is affected and how will they react How much can you do yourself and how much help do you need
You need to have a clear vision - people like to either seehear or feel the change
2 Consider Timing
Think about the best time to instigate change The greater the degree of change needed the more useful it is to piggy back the change on some actual or perceived crisis For example improvements in work practices may be more acceptable in times of recession when people are concerned about keeping their jobs
You may find that there is a natural window of opportunity where the change makes sense to the majority of people Realise that major change takes time and allow for that If you attempt to rush through a change attitudes may not have changed and the change effect may not last in the long term
3 Be Aware of Culture
Most change initiatives fail because of a lack of recognition of the importance of culture It is difficult to define but if change is to work you need to be aware of the way we do things around here
When planning strategies for managing change aim to involve people in identifying the cultural web in your business
4 Create Visible Short-term Wins
Help people to see the benefits of change in the short term For example if you are changing how you interact with customers publicise some of the positive feedback from them to encourage staff to continue with the new ways of working
Page916
- 9 - Lead and Manage Organisational Change HANDOUT 25aug15
5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
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- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page516
- 5 - Lead and Manage Organisational Change HANDOUT 25aug15
1 Identify who is losing what and why
2 Accept the reality and importance of the subjective losses (Donrsquot be surprised at ldquooverreactionrdquo)
3 Expect and accept the signs of ldquogrievingrdquo Acknowledge the losses openly and with empathy
4 Give people information again and again define whatrsquos over and what isnrsquot what has changed and what
stays the same
5 Mark the endings treat the past with respect
6 Provide plenty of forums for discussion about both positive and negative changes
7 Provide coaching services preferably from outside sources
Providing coaching for change
An effective way of dealing with these issues is by offering the services of coaches to deal with change management
Individual time and attention with a professional coach is an excellent way for people to deal with their experiences
The opportunity to discuss the un-discussables with an outside person can create smooth transitions
The second step through transitions involves the acceptance of a neutral zone a sort of no-manrsquos land between the old
reality and the new It is the time between the old identity and the new It is a most uncomfortable time because of the
insecurity of not knowing If you donrsquot expect this period and deal with it you may mistakenly conclude that the
confusion you feel is a sign that therersquos something wrong with the program
If you try to rush through this period you risk compromising the change program ndash but also you will lose a great
opportunity As painful and uncomfortable as people feel in this neutral zone it is the individualrsquos and the
organisationrsquos best chance for creativity renewal and development
The neutral zone is both a dangerous and an opportune place It is the very core of the transition process It is the time
that people want most to leave and to abort the process It is the place and time when the old habits that are no longer
adaptive to the situation are extinguished and new better patterns of habit begin to take shape It is the chaos in which
the old form of things dissolves and from which the new form emerges
People make the new beginning only if they have first made an ending and spent some time in the neutral zone Yet
most organisations try to start with the beginning rather that finishing with the old first
First You Lose and Then You Winhellip
When major changes are announced they emphasise all the benefits that will follow with the successful new strategies
While fanfare and power point presentations can be theatrical and entertaining the danger lies in giving little attention
to the reality of loss that the changes are bringing Change means loss The loss has to be processed before people will
change their behaviours in the desired direction Here are some common reactions that arise
Anger This may be evident as grumbling as foot-dragging mistakes and even sabotage Listen to what is being said
Donrsquot take on the blame however when anger is being misdirected at you Distinguish between acceptable feelings
and unacceptable acting-out behaviours
Bargaining There may be unrealistic attempts to get out of the situation by trying to strike a deal Distinguish these
efforts from real problem solving Donrsquot be swayed by desperate arguments and impossible promises
Anxiety The fear of an unknown future may lead some to create catastrophic fantasies Such feelings may be silent or
expressed Again acknowledge and accept these emotions as natural Donrsquot make people feel stupid for experiencing
anxiety Communicate new information as it becomes available Commiserate with them when it is not
Sadness This is the heart of the grieving process It may be experienced as everything from silence to tears It is often
behind feelings of anger Encourage people to say what they are feeling and share your feelings too Trying to reassure
people with unrealistic suggestions of hope may fall flat You can empathise as long as itrsquos genuine
Disorientation Even organised people may experience forgetfulness confusion and clumsiness during this period
These feelings are so uncomfortable that people will do strange things to avoid them Give people extra support and
attention
Depression Some people may experience feelings of hopelessness and exhaustion Depression is hard to be around
You canrsquot ignore it people still have to get their work done You can help by restoring peoplersquos sense of having some
Page616
- 6 - Lead and Manage Organisational Change HANDOUT 25aug15
control over their situations
If you suppress the feelings and push people to get over them it will be difficult to successfully enter into the new
changes with any sense of commitment or enthusiasm If you want to engage people to support an initiative with their
hearts and minds you must recognise their feelings and acknowledge their losses before moving into new beginnings
Managing Organizational Change Organizational change occurs when a company makes a transition from its current state to some desired future state Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change effort Todays business environment requires companies to undergo changes almost constantly if they are to remain competitive Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to survive Such changes may be relatively minormdashas in the case of installing a new software programmdashor quite majormdashas in the case of refocusing an overall marketing strategy fighting off a hostile takeover or transforming a company in the face of persistent foreign competition Organizational change initiatives often arise out of problems faced by a company In some cases however companies change under the impetus of enlightened leaders who first recognize and then exploit new potentials dormant in the organization or its circumstances Some observers more soberly label this a performance gap which able management is inspired to close But organizational change is also resisted andmdashin the opinion of its promotersmdashfails The failure may be due to the manner in which change has been visualized announced and implemented or because internal resistance to it builds Employees in other words sabotage those changes they view as antithetical to their own interests AREAS OF ORGANIZATIONAL CHANGE Students of organizational change identify areas of change in order to analyze them Daniel Wischnevsky and Fariborz Daman for example writing in Journal of Managerial Issues single out strategy structure and organizational power Others add technology or the corporate population (people) All of these areas of course are related companies often must institute changes in all areas when they attempt to make changes in one The first area strategic change can take place on a large scalemdashfor example when a company shifts its resources to enter a new line of businessmdashor on a small scalemdashfor example when a company makes productivity improvements in order to reduce costs There are three basic stages for a company making a strategic change 1) realizing that the current strategy is no longer suitable for the companys situation 2) establishing a vision for the companys future direction and 3) implementing the change and setting up new systems to support it Technological changes are often introduced as components of larger strategic changes although they sometimes take place on their own An important aspect of changing technology is determining who in the organization will be threatened by the change To be successful a technology change must be incorporated into the companys overall systems and a management structure must be created to support it Structural changes can also occur due to strategic changesmdashas in the case where a company decides to acquire another business and must integrate itmdashas well as due to operational changes or changes in managerial style For example a company that wished to implement more participative decision making might need to change its hierarchical structure People changes can become necessary due to other changes or sometimes companies simply seek to change workers attitudes and behaviors in order to increase their effectiveness or to stimulate individual or team creative-ness Almost always people changes are the most difficult and important part of the overall change process The science of organization development was created to deal with changing people on the job through techniques such as education and training team building and career planning RESISTANCE TO CHANGE A manager trying to implement a change no matter how small should expect to encounter some resistance from within the organization Resistance to change is normal people cling to habits and to the status quo
Page716
- 7 - Lead and Manage Organisational Change HANDOUT 25aug15
To be sure managerial actions can minimize or arouse resistance People must be motivated to shake off old habits This must take place in stages rather than abruptly so that managed change takes on the character of natural change In addition to normal inertia organization change introduces anxieties about the future If the future after the change comes to be perceived positively resistance will be less Education and communication are therefore key ingredients in minimizing negative reactions Employees can be informed about both the nature of the change and the logic behind it before it takes place through reports memos group presentations or individual discussions Another important component of overcoming resistance is inviting employee participation and involvement in both the design and implementation phases of the change effort Organized forms of facilitation and support can be deployed Managers can ensure that employees will have the resources to bring the change about managers can make themselves available to provide explanations and to minimize stress arising in many scores of situations Some companies manage to overcome resistance to change through negotiation and rewards They offer employees concrete incentives to ensure their cooperation Other companies resort to manipulation or using subtle tactics such as giving a resistance leader a prominent position in the change effort A final option is coercion which involves punishing people who resist or using force to ensure their cooperation Although this method can be useful when speed is of the essence it can have lingering negative effects on the company Of course no method is appropriate to every situation and a number of different methods may be combined as needed TECHNIQUES FOR MANAGING CHANGE EFFECTIVELY Managing change effectively requires moving the organization from its current state to a future desired state at minimal cost to the organization Key steps in that process are
1 Understanding the current state of the organization This involves identifying problems the company faces assigning a level of importance to each one and assessing the kinds of changes needed to solve the problems
2 Competently envisioning and laying out the desired future state of the organization This involves picturing the ideal situation for the company after the change is implemented conveying this vision clearly to everyone involved in the change effort and designing a means of transition to the new state An important part of the transition should be maintaining some sort of stability some thingsmdashsuch as the companys overall mission or key personnelmdashshould remain constant in the midst of turmoil to help reduce peoples anxiety
3 Implementing the change in an orderly manner This involves managing the transition effectively It might be helpful to draw up a plan allocate resources and appoint a key person to take charge of the change process The companys leaders should try to generate enthusiasm for the change by sharing their goals and vision and acting as role models In some cases it may be useful to try for small victories first in order to pave the way for later successes
Change is natural of course Proactive management of change to optimize future adaptability is invariably a more creative way of dealing with the dynamisms of industrial transformation than letting them happen willy-nilly That process will succeed better with the help of the the companys human resources than
Page816
- 8 - Lead and Manage Organisational Change HANDOUT 25aug15
The Role of Thinking and Feeling
Thinking differently can help change behaviour and lead to better results
Collect data analyse it
Present the information logically to change peoplersquos thinking
Changed thinking in turn can change behaviour
Feeling differently can change behaviour MORE and lead to even better results
Create surprising compelling and if possible visual experiences
The experiences change how people feel about a situation
A change in feelings can lead to a significant change in behaviour
Follow these strategies for managing change
When you throw a pebble into a pond you create ripples in the water You get the same ripples when you create a change in your business
Think about these strategies for managing your change so that ripples do not become major waves - that ruin your plans
1 Decide on your Change Goal
Start with the end in mind What do you want to achieve How will you know if it has been achieved Who is affected and how will they react How much can you do yourself and how much help do you need
You need to have a clear vision - people like to either seehear or feel the change
2 Consider Timing
Think about the best time to instigate change The greater the degree of change needed the more useful it is to piggy back the change on some actual or perceived crisis For example improvements in work practices may be more acceptable in times of recession when people are concerned about keeping their jobs
You may find that there is a natural window of opportunity where the change makes sense to the majority of people Realise that major change takes time and allow for that If you attempt to rush through a change attitudes may not have changed and the change effect may not last in the long term
3 Be Aware of Culture
Most change initiatives fail because of a lack of recognition of the importance of culture It is difficult to define but if change is to work you need to be aware of the way we do things around here
When planning strategies for managing change aim to involve people in identifying the cultural web in your business
4 Create Visible Short-term Wins
Help people to see the benefits of change in the short term For example if you are changing how you interact with customers publicise some of the positive feedback from them to encourage staff to continue with the new ways of working
Page916
- 9 - Lead and Manage Organisational Change HANDOUT 25aug15
5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
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organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
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- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
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- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page616
- 6 - Lead and Manage Organisational Change HANDOUT 25aug15
control over their situations
If you suppress the feelings and push people to get over them it will be difficult to successfully enter into the new
changes with any sense of commitment or enthusiasm If you want to engage people to support an initiative with their
hearts and minds you must recognise their feelings and acknowledge their losses before moving into new beginnings
Managing Organizational Change Organizational change occurs when a company makes a transition from its current state to some desired future state Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change effort Todays business environment requires companies to undergo changes almost constantly if they are to remain competitive Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to survive Such changes may be relatively minormdashas in the case of installing a new software programmdashor quite majormdashas in the case of refocusing an overall marketing strategy fighting off a hostile takeover or transforming a company in the face of persistent foreign competition Organizational change initiatives often arise out of problems faced by a company In some cases however companies change under the impetus of enlightened leaders who first recognize and then exploit new potentials dormant in the organization or its circumstances Some observers more soberly label this a performance gap which able management is inspired to close But organizational change is also resisted andmdashin the opinion of its promotersmdashfails The failure may be due to the manner in which change has been visualized announced and implemented or because internal resistance to it builds Employees in other words sabotage those changes they view as antithetical to their own interests AREAS OF ORGANIZATIONAL CHANGE Students of organizational change identify areas of change in order to analyze them Daniel Wischnevsky and Fariborz Daman for example writing in Journal of Managerial Issues single out strategy structure and organizational power Others add technology or the corporate population (people) All of these areas of course are related companies often must institute changes in all areas when they attempt to make changes in one The first area strategic change can take place on a large scalemdashfor example when a company shifts its resources to enter a new line of businessmdashor on a small scalemdashfor example when a company makes productivity improvements in order to reduce costs There are three basic stages for a company making a strategic change 1) realizing that the current strategy is no longer suitable for the companys situation 2) establishing a vision for the companys future direction and 3) implementing the change and setting up new systems to support it Technological changes are often introduced as components of larger strategic changes although they sometimes take place on their own An important aspect of changing technology is determining who in the organization will be threatened by the change To be successful a technology change must be incorporated into the companys overall systems and a management structure must be created to support it Structural changes can also occur due to strategic changesmdashas in the case where a company decides to acquire another business and must integrate itmdashas well as due to operational changes or changes in managerial style For example a company that wished to implement more participative decision making might need to change its hierarchical structure People changes can become necessary due to other changes or sometimes companies simply seek to change workers attitudes and behaviors in order to increase their effectiveness or to stimulate individual or team creative-ness Almost always people changes are the most difficult and important part of the overall change process The science of organization development was created to deal with changing people on the job through techniques such as education and training team building and career planning RESISTANCE TO CHANGE A manager trying to implement a change no matter how small should expect to encounter some resistance from within the organization Resistance to change is normal people cling to habits and to the status quo
Page716
- 7 - Lead and Manage Organisational Change HANDOUT 25aug15
To be sure managerial actions can minimize or arouse resistance People must be motivated to shake off old habits This must take place in stages rather than abruptly so that managed change takes on the character of natural change In addition to normal inertia organization change introduces anxieties about the future If the future after the change comes to be perceived positively resistance will be less Education and communication are therefore key ingredients in minimizing negative reactions Employees can be informed about both the nature of the change and the logic behind it before it takes place through reports memos group presentations or individual discussions Another important component of overcoming resistance is inviting employee participation and involvement in both the design and implementation phases of the change effort Organized forms of facilitation and support can be deployed Managers can ensure that employees will have the resources to bring the change about managers can make themselves available to provide explanations and to minimize stress arising in many scores of situations Some companies manage to overcome resistance to change through negotiation and rewards They offer employees concrete incentives to ensure their cooperation Other companies resort to manipulation or using subtle tactics such as giving a resistance leader a prominent position in the change effort A final option is coercion which involves punishing people who resist or using force to ensure their cooperation Although this method can be useful when speed is of the essence it can have lingering negative effects on the company Of course no method is appropriate to every situation and a number of different methods may be combined as needed TECHNIQUES FOR MANAGING CHANGE EFFECTIVELY Managing change effectively requires moving the organization from its current state to a future desired state at minimal cost to the organization Key steps in that process are
1 Understanding the current state of the organization This involves identifying problems the company faces assigning a level of importance to each one and assessing the kinds of changes needed to solve the problems
2 Competently envisioning and laying out the desired future state of the organization This involves picturing the ideal situation for the company after the change is implemented conveying this vision clearly to everyone involved in the change effort and designing a means of transition to the new state An important part of the transition should be maintaining some sort of stability some thingsmdashsuch as the companys overall mission or key personnelmdashshould remain constant in the midst of turmoil to help reduce peoples anxiety
3 Implementing the change in an orderly manner This involves managing the transition effectively It might be helpful to draw up a plan allocate resources and appoint a key person to take charge of the change process The companys leaders should try to generate enthusiasm for the change by sharing their goals and vision and acting as role models In some cases it may be useful to try for small victories first in order to pave the way for later successes
Change is natural of course Proactive management of change to optimize future adaptability is invariably a more creative way of dealing with the dynamisms of industrial transformation than letting them happen willy-nilly That process will succeed better with the help of the the companys human resources than
Page816
- 8 - Lead and Manage Organisational Change HANDOUT 25aug15
The Role of Thinking and Feeling
Thinking differently can help change behaviour and lead to better results
Collect data analyse it
Present the information logically to change peoplersquos thinking
Changed thinking in turn can change behaviour
Feeling differently can change behaviour MORE and lead to even better results
Create surprising compelling and if possible visual experiences
The experiences change how people feel about a situation
A change in feelings can lead to a significant change in behaviour
Follow these strategies for managing change
When you throw a pebble into a pond you create ripples in the water You get the same ripples when you create a change in your business
Think about these strategies for managing your change so that ripples do not become major waves - that ruin your plans
1 Decide on your Change Goal
Start with the end in mind What do you want to achieve How will you know if it has been achieved Who is affected and how will they react How much can you do yourself and how much help do you need
You need to have a clear vision - people like to either seehear or feel the change
2 Consider Timing
Think about the best time to instigate change The greater the degree of change needed the more useful it is to piggy back the change on some actual or perceived crisis For example improvements in work practices may be more acceptable in times of recession when people are concerned about keeping their jobs
You may find that there is a natural window of opportunity where the change makes sense to the majority of people Realise that major change takes time and allow for that If you attempt to rush through a change attitudes may not have changed and the change effect may not last in the long term
3 Be Aware of Culture
Most change initiatives fail because of a lack of recognition of the importance of culture It is difficult to define but if change is to work you need to be aware of the way we do things around here
When planning strategies for managing change aim to involve people in identifying the cultural web in your business
4 Create Visible Short-term Wins
Help people to see the benefits of change in the short term For example if you are changing how you interact with customers publicise some of the positive feedback from them to encourage staff to continue with the new ways of working
Page916
- 9 - Lead and Manage Organisational Change HANDOUT 25aug15
5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
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- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
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- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page716
- 7 - Lead and Manage Organisational Change HANDOUT 25aug15
To be sure managerial actions can minimize or arouse resistance People must be motivated to shake off old habits This must take place in stages rather than abruptly so that managed change takes on the character of natural change In addition to normal inertia organization change introduces anxieties about the future If the future after the change comes to be perceived positively resistance will be less Education and communication are therefore key ingredients in minimizing negative reactions Employees can be informed about both the nature of the change and the logic behind it before it takes place through reports memos group presentations or individual discussions Another important component of overcoming resistance is inviting employee participation and involvement in both the design and implementation phases of the change effort Organized forms of facilitation and support can be deployed Managers can ensure that employees will have the resources to bring the change about managers can make themselves available to provide explanations and to minimize stress arising in many scores of situations Some companies manage to overcome resistance to change through negotiation and rewards They offer employees concrete incentives to ensure their cooperation Other companies resort to manipulation or using subtle tactics such as giving a resistance leader a prominent position in the change effort A final option is coercion which involves punishing people who resist or using force to ensure their cooperation Although this method can be useful when speed is of the essence it can have lingering negative effects on the company Of course no method is appropriate to every situation and a number of different methods may be combined as needed TECHNIQUES FOR MANAGING CHANGE EFFECTIVELY Managing change effectively requires moving the organization from its current state to a future desired state at minimal cost to the organization Key steps in that process are
1 Understanding the current state of the organization This involves identifying problems the company faces assigning a level of importance to each one and assessing the kinds of changes needed to solve the problems
2 Competently envisioning and laying out the desired future state of the organization This involves picturing the ideal situation for the company after the change is implemented conveying this vision clearly to everyone involved in the change effort and designing a means of transition to the new state An important part of the transition should be maintaining some sort of stability some thingsmdashsuch as the companys overall mission or key personnelmdashshould remain constant in the midst of turmoil to help reduce peoples anxiety
3 Implementing the change in an orderly manner This involves managing the transition effectively It might be helpful to draw up a plan allocate resources and appoint a key person to take charge of the change process The companys leaders should try to generate enthusiasm for the change by sharing their goals and vision and acting as role models In some cases it may be useful to try for small victories first in order to pave the way for later successes
Change is natural of course Proactive management of change to optimize future adaptability is invariably a more creative way of dealing with the dynamisms of industrial transformation than letting them happen willy-nilly That process will succeed better with the help of the the companys human resources than
Page816
- 8 - Lead and Manage Organisational Change HANDOUT 25aug15
The Role of Thinking and Feeling
Thinking differently can help change behaviour and lead to better results
Collect data analyse it
Present the information logically to change peoplersquos thinking
Changed thinking in turn can change behaviour
Feeling differently can change behaviour MORE and lead to even better results
Create surprising compelling and if possible visual experiences
The experiences change how people feel about a situation
A change in feelings can lead to a significant change in behaviour
Follow these strategies for managing change
When you throw a pebble into a pond you create ripples in the water You get the same ripples when you create a change in your business
Think about these strategies for managing your change so that ripples do not become major waves - that ruin your plans
1 Decide on your Change Goal
Start with the end in mind What do you want to achieve How will you know if it has been achieved Who is affected and how will they react How much can you do yourself and how much help do you need
You need to have a clear vision - people like to either seehear or feel the change
2 Consider Timing
Think about the best time to instigate change The greater the degree of change needed the more useful it is to piggy back the change on some actual or perceived crisis For example improvements in work practices may be more acceptable in times of recession when people are concerned about keeping their jobs
You may find that there is a natural window of opportunity where the change makes sense to the majority of people Realise that major change takes time and allow for that If you attempt to rush through a change attitudes may not have changed and the change effect may not last in the long term
3 Be Aware of Culture
Most change initiatives fail because of a lack of recognition of the importance of culture It is difficult to define but if change is to work you need to be aware of the way we do things around here
When planning strategies for managing change aim to involve people in identifying the cultural web in your business
4 Create Visible Short-term Wins
Help people to see the benefits of change in the short term For example if you are changing how you interact with customers publicise some of the positive feedback from them to encourage staff to continue with the new ways of working
Page916
- 9 - Lead and Manage Organisational Change HANDOUT 25aug15
5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page816
- 8 - Lead and Manage Organisational Change HANDOUT 25aug15
The Role of Thinking and Feeling
Thinking differently can help change behaviour and lead to better results
Collect data analyse it
Present the information logically to change peoplersquos thinking
Changed thinking in turn can change behaviour
Feeling differently can change behaviour MORE and lead to even better results
Create surprising compelling and if possible visual experiences
The experiences change how people feel about a situation
A change in feelings can lead to a significant change in behaviour
Follow these strategies for managing change
When you throw a pebble into a pond you create ripples in the water You get the same ripples when you create a change in your business
Think about these strategies for managing your change so that ripples do not become major waves - that ruin your plans
1 Decide on your Change Goal
Start with the end in mind What do you want to achieve How will you know if it has been achieved Who is affected and how will they react How much can you do yourself and how much help do you need
You need to have a clear vision - people like to either seehear or feel the change
2 Consider Timing
Think about the best time to instigate change The greater the degree of change needed the more useful it is to piggy back the change on some actual or perceived crisis For example improvements in work practices may be more acceptable in times of recession when people are concerned about keeping their jobs
You may find that there is a natural window of opportunity where the change makes sense to the majority of people Realise that major change takes time and allow for that If you attempt to rush through a change attitudes may not have changed and the change effect may not last in the long term
3 Be Aware of Culture
Most change initiatives fail because of a lack of recognition of the importance of culture It is difficult to define but if change is to work you need to be aware of the way we do things around here
When planning strategies for managing change aim to involve people in identifying the cultural web in your business
4 Create Visible Short-term Wins
Help people to see the benefits of change in the short term For example if you are changing how you interact with customers publicise some of the positive feedback from them to encourage staff to continue with the new ways of working
Page916
- 9 - Lead and Manage Organisational Change HANDOUT 25aug15
5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page916
- 9 - Lead and Manage Organisational Change HANDOUT 25aug15
5 Communicate
Recognise that effective communication may be the single most important factor in overcoming resistance to change Communicate your vision and strategic intent clearly Be honest and encourage two way discussion
Use a variety of media (1 to 1 1 to many circulars noticeboards etc) depending on nature and sensitivity of the change And involve all levels in the business in communicating the change
Why Change Management Programmes Fail
Here are some common reasons why strategies for managing change do not work Take note if you are the change agent so that you dont make the same mistakes when planning your strategies for managing change
Unclear or incorrect goals or vision
Insufficient communication and motivation
Change seen as a senior management issue only
Implementation strategy not thought through
Initial problems throw project off course
Too much focus on the technical side of change ndash rather than people issues
Culture not changed
Strategies for Managing Change - Step by Step
If you are the change agent responsible for managing a change follow these steps as well as the change management strategies outlined above to help the change happen smoothly
1 Hold Management Visioning and Planning workshops using change management tools (click here for suggestions)
2 Agree a clear vision of what change will achieve
3 Assemble a change management team
4 Engage and involve all employees through workshops and other communication methods
5 Amend vision and plan based on discussions with employees
6 Communicate with imagination
7 Manage change project
8 Stay committed until change is established (refrozen)
Strategies for Managing Change in a Crisis
Different change management methodologies are called for when the business is in real danger A turnaround strategy is needed with the emphasis on speed of change rapid cost reduction andor revenue generation
Managers need to be able to prioritise the things that give quick and significant improvements Here are
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page1016
- 10 - Lead and Manage Organisational Change HANDOUT 25aug15
important steps that need to be taken in a crisis
stabilise crisis
prioritise critical improvement areas
restructure finances
refocus on vision and goals
clarify target markets
Win stakeholder support
Change management team if necessary
You may benefit from the services of a change management consultant in such situations
Managing Change
As increasingly powerful informatics systems are designed developed and implemented they inevitably affect larger
more heterogeneous groups of people and more organizational areas In turn the major challenges to system success
are often more behavioral than technical Successfully introducing such systems into complex health care organizations
requires an effective blend of good technical and good organizational skills People who have low psychological
ownership in a system and who vigorously resist its implementation can bring a ldquotechnically bestrdquo system to its knees
However effective leadership can sharply reduce the behavioral resistance to changemdashincluding to new
technologiesmdashto achieve a more rapid and productive introduction of informatics technology This paper looks at four
major areasmdashwhy information system failures occur the core theories supporting change management the practical
applications of change management and the change management efforts in informatics
Its not the progress I mind its the change I dont like mdashMark Twain
Along with the inevitable failures medical informatics has had many successesmdashprobably more than should have been
expected given the challenges of the hardware software and infrastructure that faced us in the past However many
of the successful systems were implemented as stand-alone systems that involved a modest number of people
Furthermore the systems were often implemented in specific limited areas that could see potential direct benefits from
the systems Typically there were local champions who made major and personal commitments to the success of the
systems and the enthusiasm of these champions was readily transmitted to the people with whom they worked
directly In turn most of the people working on these systems felt like pioneers and the literature of medical
informatics is filled with their accomplishments
When we embark today on designing developing and implementing more complex systems that have wider impact a
new set of challenges looms even larger Certainly technical challenges still exist they always will However as our
new systems affect larger more heterogeneous groups of people and more organizational areas the major challenges
to systems success often become more behavioral than technical
It has become apparent in recent years that successfully introducing major information systems into complex health
care organizations requires an effective blend of good technical and good organizational skills A ldquotechnically bestrdquo
system can be brought to its knees by people who have low psychological ownership in the system and who vigorously
resist its implementation The leader who knows how to manage the organizational impact of information systems can
sharply reduce the behavioral resistance to change including to new technology to achieve a more rapid and
productive introduction of information technology
Knowledge of the significance of people and organizational issues is not new One of our informatics pioneers Octo
Barnett identified political and organizational factors as being important 30 years ago1 However given the realities of
that era they were ldquowell down the listrdquo By 1998 Reed Gardner another definite pioneer stated in his Davies
Lecture2
In my opinion the success of a project is perhaps 80 percent dependent on the development of the social and political
interaction skills of the developer and 20 percent or less on the implementation of the hardware and software
technology
We are seeing a shift in the balance of the people and organizational issues as opposed to the technical issues An
effective medical informatics change strategy can help convert what health care organizations are experiencing
todaymdashtechnology-centered tensionmdashinto welcomed opportunities that will lead to improvement in all phases of the
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page1116
- 11 - Lead and Manage Organisational Change HANDOUT 25aug15
health care process
The content that supports both the intellectual content and strategy for this cornerstone comes from multiple
disciplines eg psychology sociology management and anthropology This paper discusses four major topicsmdashwhy
information system failures occur the core theories supporting change management the practical applications of
change management and the change management efforts in informatics
Why Do Information System Failures Occur
Complex problems rarely have simple solutions During the many stages of the solution process there are numerous
opportunities to go wrong whether the solution tends to be a technical one or not As we delve into increasingly
complex medical informatics problems we will increasingly face this challenge In reviewing information system
failures cited in the literature as well as drawing on our personal observations and experiences we have seen the rising
importance of the human issues that are often referred to as people and organizational issues
Change and Change Management
Technology has indeed taken a place next to war death divorce and taxes as a prime cause of bone-shuddering
anxietymdashJohn Seymour
Change is a constant in both our professional and our private lives Our children grow up taking for granted such things
as powerful personal computers that we could not envision at their ages The idea that human beings naturally resist
change is deeply embedded in our thinking about change Our language (eg ldquoresistance to changerdquo) our assumptions
and our mental models about change all seem to imply that something in our natures leads us to resist change
However it is easy to find examples of human beings from childhood on through old age actively seeking out change
of all sorts Human beings do not necessarily resist change automatically however many people do resist being
changed ie having changes imposed on them
Organizational change normally involves some threat real or perceived of personal loss for those involved This threat
may vary from job security to simply the disruption of an established routine Furthermore there may be tradeoffs
between the long and short run As an individual I may clearly perceive that a particular proposed change is in the
long run in my own best interests and I may be very interested in seeing it happen yet I may have short-run concerns
that lead me to oppose particular aspects of the change or even the entire change project
The rate of change is escalating in virtually all organizations The pressure is intense on anybody connected with the
health-related world to focus time and attention on understanding the forces driving the changing environment and
develop or implement the information systems needed to support the altered environment
Change Management
The phrase change management is very common in management articles as well as newspapers oreover managerial
interest in the topic has been stimulated by the comments of Peter Drucker as to whether one can manage change at all
or merely lead or facilitate its occurrence within an organization Nevertheless using the traditional terminology what
is meant by change management how did it evolve and why has this concept become so important
Change management is the process by which an organization gets to its future state its vision While traditional
planning processes delineate the steps on the journey change management attempts to facilitate that journey
Therefore creating change starts with creating a vision for change and then empowering individuals to act as change
agents to attain that vision The empowered change management agentrsquos need plans that provide a total systems
approach are realistic and are future oriented Change management encompasses the effective strategies and programs
to enable those change agents to achieve the new vision
Todays change management strategies and techniques derive from the theoretic work of a number of early researchers
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page1216
- 12 - Lead and Manage Organisational Change HANDOUT 25aug15
Practical Applications of Change Management
There is nothing more difficult to take in hand more perilous to conduct or more uncertain in its success than to take
the lead in the introduction of a new order of thingsmdashNiccolo Machiavelli
One of the most difficult problems organizations face is dealing with change In todays rapidly changing highly
competitive environment the ability to change rapidly efficiently and almost continually will distinguish the winners
from the losers Many health-related organizations will disappear because they find themselves unable to adapt
Furthermore many of the pressures for change in health care organizations are independent of technologic change
This means that informaticians working for change are doing so in organizations that are already highly stressed by
other pressures
Major organizational changes typically involve many different types and levels of personal loss for the people in the
organization For example change always requires the effort to learn the new which is a loss in terms of time and
energy that could have been used elsewhere Although some may welcome the learning opportunity many of us dont
want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful
advantages to the proposed change Upgrading to new software is a common example in which the future benefits
may not be seen as sufficient to outweigh the short-term investment required to learn the new programs
Second people want to feel good about themselves Ideally people are able to take pride in their work feel responsible
for a job well done feel they are part of a high-quality enterprise and feel that their time has some significance In
many work situations the work itself and the organizational culture make it difficult for people to feel good about
themselves In these poorer situations people usually invent strategies to help them feel better about themselves and
these strategies involve getting some sense of control belongingness and significance out of their work Sometimes
this involves opposition to management on the assumption that management is always up to no good More
commonly the worker-management relationships are not completely alienated Still the workers strategies for
achieving ldquogoodrdquo feelings are unknown to or quite misunderstood by management Therefore change initiatives
unknowingly and unintentionally threaten to cause the workers serious personal loss Not surprisingly the workers
resist and do all they can to sabotage such change initiatives
Third change initiatives often require large losses for middle managers Generally people perceive that information
systems increase the ability of top executives to know more about what is going on and to exert more direct control
This means a serious loss of personal and organizational significance for the middle manager Sometimes middle
managers fight this loss Any significant organizational change involves changing habits that is changing the way we
actually do our work This usually involves changes in the way we interact both with people and our tools New
systems require us to learn a new set of behaviors
Types of Change
Changes in an organization can often be identified as one of four types with the definite possibility of overlap among
them
Operational changes affect the way the ongoing operations of the business are conducted such as the
automation of a particular area
Strategic changes occur in the strategic business direction eg moving from an inpatient to an outpatient
focus
Cultural changes affect the basic organizational philosophies by which the business is conducted eg
implementing a continuous quality improvement (CQI) system
Political changes in staffing occur primarily for political reasons of various types such as those that occur at
top patronage job levels in government agencies
These four different types of change typically have their greatest impacts at different levels of the organization For
example operational changes tend to have their greatest impacts at the lower levels of the organization right on the
firing line People working at the upper levels may never notice changes that cause significant stress and turmoil to
those attempting to implement the changes On the other hand the impact of political changes is typically felt most at
the higher organizational levels As the name implies these changes are typically made not for results-oriented reasons
but for reasons such as partisan politics or internal power struggles When these changes occur in a relatively
bureaucratic organization as they often do those working at the bottom often hardly notice the changes at the top
Patients are seen and the floors are cleaned exactly as they were before The key point is that performance was not the
basis of the change therefore the performers are not much affected
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page1316
- 13 - Lead and Manage Organisational Change HANDOUT 25aug15
The Cast of Characters
For any given change people can occupy a wide range of roles that will strongly influence their perceptions of the
change and their reactions to it These are roles such as champion end user developerbuilder watchful observer
obstructionist and such As on the stage some people may occasionally play more than one role In other cases the
roles are unique Unless we clearly identify both the players and their roles in any change situation we risk making
decisions and taking action based on generalizations that are not true for some of the key players
An overview term often applied to the various roles is stakeholders The stakeholders have some interest or stake in the
quality of both the change and the change implementation process The role of the stakeholders are subject to change
especially during a change process that extends over some time
For those implementing change the following steps are critical
To identify what roles they themselves are occupying in the process
To identify what roles the others involved in the process are playing being careful to recognize multiple roles
To identify carefully which role is speaking when one is communicating with those playing multiple roles
To monitor throughout the process whether any roles are changing
Resistance to Change
It is easy to change the things that nobody cares about It becomes difficult when you start to change the things that
people do care aboutmdashor when they start to care about the things that you are changingmdashLorenzi and Riley
Resistance to change is an ongoing problem At both the individual and the organizational levels resistance to change
impairs concerted efforts to improve performance Many corporate change efforts have been initiated at tremendous
cost only to be halted by resistance among the organizations employees Organizations as a whole also manifest
behavior similar to that of individuals when faced with the need to change
The relationship between individual and organizational resistance to change is important An organization is a complex
system of relationships between people leaders technologies and work processes From this interaction emerges
organizational behavior culture and performance
These emergent properties and behaviors are tightly linked in two directions to the lower-level interactions
Organizational resistance to change is an emergent property and individual resistance to change can give rise to
organizational resistance A self-reinforcing loop of increasing resistance can develop as individuals create a
environment in which resistance to change is the norm That environment in turn encourages increased resistance to
change among individual employees The self-reinforcing nature of this loop can be tremendously powerful defeating
repeated attempts to break out of it
Studies of system dynamics frequently reveal that major problems that everyone thought were external are actually the
unintended consequences of internal policies The basic dynamic behind this phenomenon is that the organization is
made up of a network of circular causal processes A influences B which then influences C which in turn influences
A ie the snake bites its own tail Understanding these internal organizational dynamics is a prerequisite for leading
effective change processes
The Road Ahead
Im very interested in the future because I plan to spend the rest of my life theremdashRobert Wood Johnson
As medical informatics becomes involved in ever larger and more complex systems both the overall organizational
leaders and the informatics leaders must adapt to the following realities
When the impact of technologic change is being managed peoples needs come first Without people we dont have an
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page1416
- 14 - Lead and Manage Organisational Change HANDOUT 25aug15
organization We must implement the new technologies to do what they do bestmdashstructured repetitive workmdashand let
the people do what they do bestmdashthink be creative and solve problems People are far better at reviewing boring
work than doing it It is because of these concepts that workflow technology is rapidly changing the role of todays
information worker from an information transcriber and mover to a true knowledge workermdashan information user
The knowledge workers are the foundation According to Peter Drucker in ldquoThe New Society of Organizationsrdquo the
world economy is in the midst of transformation to the ldquoknowledge societyrdquo Increasingly knowledge is not just one
resource among many it is ldquothe primary resource for individuals and for the economy overallrdquo The essential purpose
of management in the knowledge society is to encourage systematic organizational innovation Drucker makes the
important point that in a knowledge economy the true source of competitive advantage is not so much technology
research and development or even knowledge itself It is the people the knowledge workers whose skills and expertise
are the foundation for all innovation
We need to develop a new way of looking at how we currently function in our organizations Management and
workers will have to come together to build better more productive work environments by understanding the long-
term issues affecting their future and by creating a new way of thinking about how these current enabling technologies
can best be used
Technology Is Not Enough
Because technology investments are largely made up of things (ie hardware and software) it is easy to make the
mistake of believing that a technology is implemented once it has been bought and installed In fact nothing works
without people These human issues become magnified in the process of redesigning work processes Many work-
process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of
work In these instances organizations fail to explore nontechnical solutions to improving organization processes such
as training or changes in structures procedures and management practices Most often technology strategy drives
organizational change While the business strategy may be clear it is often not reflected in a defined organizational
change strategy
Too many technically good applications have failed because of sabotage by users who like the old ways in which
things were done Managing the natural resistance to change and helping convert that resistance into commitment and
enthusiasm must be a planned process New systems should enhance the quality of work life and increase
responsibility empowerment and motivation
The Role of Customers
We must rethink our customers needs using the concept of customer in the broad sense in the complex health care
world Any time our customers see us doing something better we win The message is that we need to identify
correctly those parts of our processes that are visible to our customers and consider reengineering them first The real
key is to ensure that we are getting the right process right For example Mutual Benefit in the United States
transformed their insurance policy issuing and payment process They were ecstatic with the results of redesigning
what had previously been a 24-day process of paying insurance claims after the redesign payments could be made in
less than a day generally within three hours Within 90 days after implementing the new processes they filed for
protection from their creditors Why They did not pay equal attention to re-engineering the processes that brought in
the money
However the concept of customer needs is also important in the internal sense In these times of increasing change it
will be even more critical that our people do not perceive that changes are being made just for the sake of change
When the culture is focused on constantly improving the meeting of customer needs the rationale for rapid and
frequent changes becomes much clearer to those in the organization This point is constantly stressed by Oren Harari in
his books and monthly columns in Management Review
The Road to Success
Common wisdom suggests that technology drives change in the organizational environment but common wisdom is
wrong Instead information technology is a powerful enabling force that creates new options and opportunities in the
environment for what organizations producemdashwhether goods or servicesmdashand how they produce it The early
response by innovative players drives change Each of the enabling technologies has the potential to transform one or
more dimensions of the workplace Taken together they act as a powerful set of technologies that organizations will
have to harness to be successful in the 21st century There are no quick fixes Solving these problems requires a
response targeted to the needs of our organization but we need to know how our organizations strategy will play out
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page1516
- 15 - Lead and Manage Organisational Change HANDOUT 25aug15
in the environment as a whole
The road ahead will not be an easy one However the medical informatics area is poised to create outcomes that many
of us could only dream of a few years ago Our challenge will be to implement our concepts and systems as smoothly
as possible not wasting our precious opportunities and resources because we ignored the pitfalls of managing change
Key Terms
Adhocracy A type of organization design which is temporary adaptive and creative in contrast with bureaucracy which tends to be
permanent rule-driven and inflexible
Administrative Controls Formalized standards rules procedures and disciplines to ensure that the organizationrsquos controls are
properly executed and enforced
Area Structure The organization is structured according to geographical areas
Basic Assumptions A term used by Schein to refer to the origins of values and cultural artefacts in organizations Basic
assumptions are shared and deeply embedded presuppositions about issues such as whether human beings do or should live for the
moment (immediate gratification) or see their activities as a means to a future end or goal (deferred gratification)
Behavioural Control A form of control based on direct personal supervision which is responsive to the particular needs of the
tasks the abilities of the manager and the norms of the organization
Belief System (Formal) The explicit set of organizational definitions that senior managers communicate formally and reinforce
systematically to provide basic values purpose and direction for the organization
Bureaucracy Describes a form of business administration based on formal rational rules and procedures designed to govern work
practices and organization activities through a hierarchical system of authority
Business Model The organizationrsquos essential logic for consistently achieving its principle objectives- explains how it consistently
makes money highlights the distinctive attributes of the organisation
Business Process Reengineering (BPR) The redesign of business processes in an effort to reduce costs increase efficiency and
effectiveness and improve quality BPR is characterized as radical rather than incremental in its approach to change and broad rather
than narrow in its organization impact
Change Agent Any person seeking to promote further support sponsor initiate implement or help to deliver change within the
organization
Classical Approach The organization is thought of in terms of its purpose and formal structure and this approach aims to identify
how methods of working can improve productivity Emphasis is placed on the planning of work the technical requirements of the
organization principles of management and the assumption of rational and logical behaviour
Classical Approach to Management The organization is thought of in terms of its purpose and formal structure and this approach
aims to identify how methods of working can improve productivity Emphasis is placed on the planning of work the technical
requirements of the organization principles of management and the assumption of rational and logical behaviour
Code of Ethics A set of ethical-behaviour rules developed by organizations or by professional societies
Communication Climate in an Organization The prevailing atmosphere open or closed in which ideas and information are
exchanged
Configuration The shape of the organizationrsquos role structure the structures processes and relationships through which the
organization operates
Contingency Approach An extension of the systems approach that implies organizational variables (eg strategy structure and
systems) and its success or performance is dependent upon environmental influences (forces) There is therefore no one best way
to structure or manage organizations rather it must be dependent upon the contingencies of the situation
Contingency Approach to Organization Structure A perspective which argues that an organization to be effective must adjust
its structure in a manner consistent with the main type of technology it uses the environment within which it operates its size and
other contextual factors
Contingency Theory of Leadership A view which argues that leaders must alter their style in a manner consistent with aspects of
the context
Continuous Change Organizational changes that tend to be ongoing evolving and cumulative
Control Ensuring plans are properly executed assuring the organization functions as planned
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills
Page1616
- 16 - Lead and Manage Organisational Change HANDOUT 25aug15
Controlled Performance Setting standards measuring performance comparing actual with standard and taking corrective action if
necessary
Controlling Ensuring plans are properly executed assuring the organization functions as planned
Cooperative Business organizations owned and operated by a group of individuals for their mutual benefit
Core Competence Those capabilities fundamental to the organizationrsquos strategy and performance
Core Values Core values are the principles that guide an organizationrsquos actions
Corporate Culture Defined by Bower as lsquothe way we do things around herersquo Trice and Beyer elaborated this as lsquothe system of
publicly and collectively accepted meanings operating for a given group at a given timersquo Hofstede describes corporate culture as
lsquothe psychological assets of an organization which can be used to predict what will happen to its financial assets in five years timersquo
Corporate Governance The system used to control and direct a companyrsquos operations
CSR-Corporate Social Responsibility A concept whereby organizations consider the interests of society by taking responsibility
for the impact of their activities on all stakeholders including the environment
Organization Development A systematic process aimed at improving organizational effectiveness and adaptiveness
on the basis of behavioural science knowledge typical stages in an OD programme include analysis diagnosis action plans and
review an external third party assists the process (See also Change Agent)
Organizational (Corporate) Culture A set of values beliefs goals norms and rituals that members of an organization share
Organization A group of people with a common purpose who work together to achieve shared goals (see formal organization
and informal organization)
Organization Theory The study of the structure functioning and performance of organizations and the behaviour of groups and
individuals within them (see also
organizational behaviour)
Organizational Behaviour The study of the structure functioning and performance of organizations and the behaviour of groups
and individuals within them
Organizational Change The alteration of organizational components (such as the mission strategy goals structure processes
systems technology and people) to improve the effectiveness or efficiency of the organization
Organizational Design The design of an organization patterns its formal structure and culture It allocates purpose and power to
departments and individuals
Matrix Management A system of management operating in a horizontal as well as vertical organization structure where typically
a manager reports to two superiors ndash one a departmentalline manager and the other a functionalproject manager
7ndashs Model A model for organizational analysis and dynamics including components strategy structure systems style staff shared
values and skills